What is meant by cashless facility in Health Insurance?

When you are at a hospital for a medical emergency, paying bills should be the least of your worries. Varun thinks so too. Which is why when he purchased health insurance, he made sure to choose a plan that offered cashless facility. 

Now, what is a cashless facility, you ask? Let’s put it this way — if you are ever in a medical crisis, you won’t have to scurry around for cash or even worry about your bank balance. Your insurer will take care of it!

But there’s one condition: You have to visit a network to avail cashless facility. Only then will your insurance company settle your medical bills. 

Let’s understand what’s covered under cashless health insurance facility: 

1. Pre hospitalization expenses
2. Post hospitalization expenses 
3. In-patient care
4. Ambulance charges
5. Domiciliary treatment 
6. Critical illness coverage
7. No-claim bonus
8. Tax benefits
9. Complementary health check up
10. Free-look periods

What exactly is a cashless facility?

In this time and age of COVID-19; diseases abound, hospitalization is not as far as we initially thought it was. When hospitalization becomes inevitable and you get admitted to a network hospital in an emergency, the immediate challenge that arises is of paying to the hospital and settling the bills.

Now, the role of Mediclaim is to reimburse and cover for any expenses that you may have incurred in the process of getting admitted to the hospital. But what about the stress which arises due to such hospitalization and the impact that it would have on your budgets and your available liquidity?

Paying the required medical bills and expenses and completing endless paperwork is one of the biggest challenges we face during health emergencies and hospitalization. The process of cashless hospitalization eliminates all these hassles and ensures a seamless experience, especially during medical emergencies. It saves you the inconvenience of reimbursement and the challenges of arranging funds to pay your hospital bills.

Fortunately, there is a solution to this, which is the cashless health insurance facility. It provides a unique advantage where you need not worry about your immediate cash in-pocket or even your bank balance, especially since hospitalization happens in an emergency, and is not always something that can be planned in advance. The top health insurance companies provide a wide range of health insurance policies that offer the cashless claim facility.

The cashless claim feature in health insurance is facilitated by the insurance provider which allows you to settle medical bills directly to the hospital. You can only avail of the cashless claim benefit if the hospitalization is at one of the network hospitals listed by the insurer.

Before delving into understanding the cashless facility, let us understand the concept of “network hospital”.

Who should buy Cashless Medical Insurance?

If it were to convince someone in enrolling for this system of hospitalization, then just the convenience of cashless insurance is enough to convince anyone of buying or upgrading/changing the specifics of their policy into this policy.

But those that could benefit the most from these policies are self-employed individuals where there is no regular fixed source of income coming in. Self-employed individuals should buy cashless health insurance because in times of health crises they are the most vulnerable

For such groups of people, a cashless policy could make a lot of difference in case if there’s any emergency at any point of life. The same can be said for individuals who cannot afford or do not vouch for the costs involved of expensive medical treatments.

A cashless policy could also be helpful when planning to travel abroad on behalf of some companies that offer health insurance coverage outside India too.

Advantages of Cashless Health Insurance

Cashless health insurance policies offered by the best health insurance companies provide a wide range of lucrative benefits. Some of these benefits are mentioned below:

• Reduced Financial Burden: With a cashless policy in force, policyholders don’t have to keep funds ready in their hands or even for that matter in their bank accounts at the moment of hospitalization in a network hospital to cover such medical expenses. This makes cashless health insurance policies especially useful during medical emergencies or unplanned situations. It eliminates the need for arranging funds and acts as a financial cover during hospitalization.
• Less Documentation: With the cashless health insurance facility, the documentation involved for the policyholder in the claim settlement process is lesser as compared to reimbursement claim. This is because the insurance company and the hospital settle the bills between themselves. Less documentation also helps you focus on treatment more and helps maintain a peace of mind.
• Tax Benefits: It will provide for tax benefits for its holders under section 80D of the Income Tax Act 1961. The limits defined are Rs. 20,000 per year, for senior citizens and Rs. 15,000 for all others. The maximum amount that you can claim tax benefits for may differ every financial year. Make sure to check the most updated tax benefits of health insurance policies to take maximum advantage of the same.
• Medical Check-Ups: Often, insurers also provide policyholders free medical check-ups at regular intervals but it again depends upon the insurer. Nowadays, many insurers provide this facility integrated with their network hospitals. Many health insurance providers offer this benefit after every claim-free year with the expenses for medical check-ups capped at a specified limit.
• Coverage While Traveling: A cashless health insurance offers you coverage while traveling. This helps you ensure financial and medical security while traveling, especially in a situation of a medical emergency at an unfamiliar place. You just need to visit any of the network hospitals listed by the insurer to avail of emergency hospitalization without having to worry about hospital bills.
• Wide Coverage: Cashless health insurance generally provides extensive coverage including pre and post-hospitalization expenses. It also includes expenses for diagnosis, treatment, medical expenses, doctor’s fees, etc., according to the capping as per your chosen policy. Treatments like dialysis, chemotherapy, surgery expenses, room expenses depending on the policy, and other daycare treatments are also covered under cashless insurance.

Buy cashless health insurance policies to avail these benefits at some of the best networks of hospitals with a wide presence across the globe.

How Does Cashless Hospitalization Work?

Health insurance companies conduct several quality checks on hospitals to ensure that their policyholders get the best treatment at a reputed hospital. After these quality tests and negotiating rates for different procedures, insurance providers tie-up with these hospitals. These hospitals are called network hospitals which means that you won’t have to settle the bill with the hospital. Your insurance provider that is represented by a third-party administrator (TPA) will coordinate and settle the bill with the hospital.

There are two ways in which you can avail the cashless claim benefit:

1. Planned Hospitalization: For planned treatment, you need to inform the insurer about the hospitalization before getting hospitalized. You will have to fill the pre-authorization form and submit it to the TPA after reaching the hospital. Your form will then be checked and verified. On approval, your insurance provider will settle the hospital expenses and other expenses related to the treatment and facilitate cashless treatment.
2. Emergency Hospitalization: For emergency hospitalization, the pre-authorization form must be filed within 24 hours of hospitalization by one of the relatives. Within 6 hours, your request will be processed by the TPA. When it is approved, the insurer will settle the hospitalization expenses directly at the hospital.

Common exclusions while applying for the cashless facility in health insurance

While the best health insurance plans do offer to cover most of the medical emergencies and conditions mentioned in their policies, the coverage is at times subject to exclusions, which the holder must be totally aware of. There two types of exclusions, temporary and permanent. Temporary exclusions are expenses that the policy won’t cover for a period defined by the insurers according to insurance principles while permanent exclusions are those expenses that the policy will never cover, and in turn, never settle or entertain no such claims against these. The permanent exclusions could be:

• Pre-existing illnesses insured bares from birth
• Congenital diseases
• HIV / AIDS
• Non-médical expenses such as hospital canteen expenses and others
• Injuries of any sort of ailments as a result of illegal activities
• Injuries under the influence of alcohol or psychotropic substances
• Routine medical examinations
• Dental procedures fall under the category of common ailments
• Joint replacements in old or young insured person, unless necessitated by an accident
• Experimental treatments 
• Fatalities or medical issues caused by terrorist acts or acts of war