How Does Health Insurance Works in India?

What's inside? 🧐

• Introduction
• Let's first understand what is health insurance
• How does health insurance work in India?
• How can I make health insurance renewals?
• What is the health insurance claim settlement process?
• Things to consider before you buy health insurance

Introduction

Imagine waking up every morning feeling energised, ready to conquer the world. You step outside, taking in a deep breath of fresh air, grateful for the vibrant health that allows you to enjoy life to the fullest. Your body is your temple, and you understand that health truly is wealth. With good health, you have the foundation to pursue your dreams, build meaningful relationships, and experience all the wonders that this world has to offer.

However, as much as we strive to maintain our health, unforeseen circumstances can sometimes disrupt our well-being. That's where health insurance comes into play. It offers peace of mind, knowing that if an illness or injury strikes, we have the necessary support to receive timely medical attention without worrying about exorbitant out-of-pocket expenses.

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Let’s First Understand What Is Health Insurance

A health insurance plan is your ultimate solution for covering all your hospitalisation expenses. It ensures that you are protected against any unexpected illnesses, accidents, or injuries. With this type of insurance, your hospitalisation costs, medication expenses, and doctor consultation fees will be taken care of.

So, how does health insurance work? Essentially, it involves paying regular premiums to an insurance provider in exchange for comprehensive coverage for medical expenses. This coverage can include doctor visits, hospital stays, prescription medications, and even preventive care such as vaccinations and screenings.

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How Does Health Insurance Work In India?

As we discussed, a health insurance policy provides you with coverage for your medical expenses in exchange for regular premium payments. With this policy, you have the ability to make multiple claims throughout the year, up to the specified cover amount or limit outlined in your policy.

It's important to note that health insurance typically has a phased approach to coverage. During the first 30 days, it does not cover any treatment for or related to any medical conditions, except in the case of accidents.

For individuals with pre-existing diseases (PEDs), which includes any condition, ailment, injury, or disease diagnosed or treated by a doctor within 36 months prior to the issuance of your health insurance policy, there will be a waiting period of up to years for PEDs. However, with the introduction of new features and benefits, certain plans offer you the opportunity to reduce this waiting period by opting for an add-on and paying an additional premium.

For instance: The Care Supreme Plan offers an add-on that allows you to reduce the waiting period for pre-existing diseases (PED) from 48 months to just 12 months. In addition, certain plans have a shorter waiting period for specific PEDs, such as asthma, diabetes, hypertension, etc.

In addition to these, there is also a waiting period of up to 36 months for specific medical conditions and treatments. You will only be able to make a claim for these conditions once the waiting period has been completed. And, besides this, there can be other waiting periods applicable too.

Now that we understand how health insurance works in India, let’s understand the renewal and its intricacies.

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How Can I Make Health Insurance Renewals?

You have access to health insurance benefits for a specific duration- usually a year. Once this period ends, you will need to renew your policy by paying the necessary premium. Renewing your health insurance involves extending or continuing your current policy for another year. Your insurance provider will inform you ahead of time about the upcoming renewal date.

While renewing your policy, keep these points in mind:

• As you review your plan for renewal, it's important to consider the advantages, restrictions, and any updates that may have occurred since your last renewal. This evaluation will assist you in determining whether your current plan continues to align with your healthcare requirements.
• Your health insurance needs can change as time goes on. When it's time to renew your policy, take a moment to think about whether any adjustments are necessary. You might need to add or remove members, or consider new riders that have become available in order to better meet your current circumstances.
• When it comes to renewing your health insurance, remember that you have the freedom to consider other health insurance plans. It's worth taking the time to explore different insurance options available in the market. By comparing coverage, premiums, benefits, and more, you can ensure that you are making the most of your healthcare investment and getting the best value for your money.
• You have the option to transfer your policy to another insurance company. You can exercise this choice by applying for portability during the time of renewal. It is important to remember that you will need to inform your insurance company at least 45 days before your health insurance renewal date.
• If you forget to renew your policy on time, it's important to know that most health insurance providers offer a grace period of 15-30 days after the due date. However, if you still don't renew your policy during this time, it will lapse. This means you will no longer have access to important benefits such as served waiting periods and any accumulated bonuses.

Note: When it comes to health insurance renewal, it's crucial for you to be proactive and avoid procrastination. Ensure that you make your decisions well in advance of the expiration date to prevent any gaps in coverage.

Another crucial aspect of health insurance is navigating the claim settlement process. When you actually make a claim, you want it seamless and hassle free. Let’s discuss the same below.

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What Is The Health Insurance Claim Settlement Process?

A health insurance claim is a formal request made by you to your insurance insurance provider, seeking compensation for medical expenses incurred. There are two types of claim settlement processes: Cashless & Reimbursement.

The cashless claim settlement process allows you to avail medical treatment without making any upfront payments. All you have to do is pay for the expenses that your plan doesn't cover. On the other hand, the reimbursement claim settlement process requires you to pay for the treatment initially and then submit the bills for reimbursement from the insurance company.

Let’s discuss each one of them in detail below:

A. Cashless Claim Settlement Process

The cashless claim settlement process allows you to receive medical treatment without having to pay upfront. Instead, the insurance company directly settles the bill with the hospital or healthcare provider, making it convenient and hassle-free for you. All you have to do is pay for the expenses that your plan doesn't cover.

Here are the steps you need to follow to submit a cashless claim -

1️⃣Verify your claim eligibility It is of utmost importance to ascertain whether you meet the criteria for a claim, particularly when it comes to medical conditions that typically require a waiting period of up to 3 years before coverage becomes effective.

2️⃣Check for cashless availability Next, confirm if your insurance provider offers cashless services at your preferred hospital.

3️⃣Verify whether the hospital is an excluded provider If your hospital is excluded, your claim won't be paid. If it's not excluded, ask if they accept cashless payments from your insurer.

4️⃣Understand the policy’s limits and conditions It's important to be familiar with your policy's limits and conditions and fully understand the coverage it provides. Take the time to check if there are any financial restrictions, such as a limit on room rent, ICU charges, or sub-limits on certain diseases and treatments (especially for planned procedures). Additionally, verify if your policy covers non-consumable items and if there is a specific list of items it does not cover. By doing so, you can estimate the costs you might have to pay yourself.

5️⃣Keep the necessary documents at hand Make sure you have all the necessary documents to avoid your cashless claim being rejected. Otherwise, you may have to pay upfront and then apply for reimbursement. Having everything ready will help prevent any inconvenience during the claim process.

Here's a list of the necessary documents you may need -

• Policy copy or cashless card
• Patient’s past medical records associated with hospitalisation such as consultation papers and follow-ups for any kind of medication or condition
• Patient’s ID proof
• Police FIR in the event of an accident.
• KYC documents of the proposer such as PAN card, Aadhar card, passport-size photo), etc

6️⃣Inform the hospital  For planned hospitalisation, submit a claim request 3-4 days before admission. For emergency hospitalisation, it is essential to submit the request within 24 hours of admission. The hospital needs specific details and documents to start a pre-authorisation request with your insurer for cashless claim approval.

Here's a list of the information and documents you'll need to provide:

• Health card
• KYC documents of the proposer such as PAN card, Aadhar card, passport-size photo, etc.
• KYC of the policyholder
• Policy number
• Policyholder’s name
• Patient’s ID proof
• Name and address of the insured for whom the claim is made
• Type of Illness/injury and recommended treatment/surgery
• Name of the medical practitioner and their residential address
• Admission date
• Honest declaration of your previous medical history, whether related or unrelated to the current condition. If you fail to provide this information during the policy purchase, it could lead to your claim being denied.

Please keep a copy of all original documents you submit for future reference.

7️⃣Pay an advance deposit  Pre-authorisation can take 6-24 hours, depending on the insurance company. They may also ask questions that you need to respond to promptly. During this period, the hospital might request an advance deposit, which will be refunded by your insurer later. To avoid any financial burden, it's wise to have an emergency fund for such payments.

Please remember that any medical expenses before hospitalisation should be claimed separately from your insurer. To ensure a smooth process, it is advisable to keep all original prescriptions, bills, receipts, and reports (including films) related to the hospitalisation.

8️⃣Track the claim process Once you're discharged, the hospital's insurance desk will notify your insurer and handle all the paperwork, including the final bill and discharge summary. Your insurer will keep you updated on your claim's progress through updates sent to your registered mobile number or email.

Sometimes, hospitals may forget to inform your insurer about your discharge or neglect to send the necessary documents, which can cause delays in the approval process. To avoid any issues, make sure to stay updated on the status of your claim by checking for communication from your insurer. The approval process usually takes 2-6 hours after your insurer is informed of your discharge. They may also have questions that need to be answered promptly. To ensure a speedy settlement, it's important to stay in touch with your insurer.

9️⃣Review the final bill and approval letter Once you receive  your final bill and approval letter, review them carefully to understand what expenses have been approved and what haven't. Feel free to reach out to your insurer or advisor if you have any questions or uncertainties. Take note of the approval letter, as it may contain information about expenses that should not be charged to the patient. Review and refrain from making payments for those expenses.

In addition to these costs, there may be other expenses not covered by your insurer that need to be paid by you before leaving the hospital.

B. Reimbursement Claim

When it comes to reimbursement, as the name suggests, you’ll have to make the payment initially to the hospital, after which you can claim the expenses from the insurance company. The reimbursement claim settlement process involves submitting your claim with all necessary documentation, followed by a review and verification by the insurance company. Once approved, the reimbursement is processed and the funds are disbursed to you.

Here are the steps to be followed to make a reimbursement claim -

1️⃣Verify whether the hospital is an excluded provider Before receiving treatment at a non-network hospital, ensure that it is not an excluded provider. If it is, your claim will not be paid, and you will need to select a different hospital. To confirm this, you can reach out to your insurance company via their toll-free number or email/SMS.

2️⃣Inform the insurance company Next, inform your insurance company within 24 hours of hospitalisation. You can find the contact information on your policy document or the insurer's website.

3️⃣Get the documents from the hospital Make sure to collect all your original documents from the hospital before you leave after receiving treatment.. These include receipts, discharge summary, claim form (a portion of which will be completed by the hospital), medical reports (including MRI/X-ray films), doctor prescriptions for all payments you made, etc. In case of any mistakes or errors, double-check the patient's name, gender, and age on each document and get the details corrected.

You can request the hospital for a detailed bill that itemises all the costs. Additionally, you should ask for a copy of the case sheet or indoor case papers and the hospital's registration certificate if the non-network hospital agrees to provide them.

4️⃣Keep the necessary documents at hand Speak with your insurer regarding the necessary documentation for submitting a reimbursement claim. Here is a general list of documents you can prepare with:

• Health card or policy copy
• KYC documents of the proposer including PAN card, Aadhar card, passport size photo, bank statement with bank name, account number, and IFSC code printed on it (or) copy of the bank passbook with the latest transaction page (or) original cancelled cheque with the policyholder’s name printed on it
• Patient's ID proof
• Filled and signed claim form
• All relevant documents: test reports, films, receipts, and medical prescriptions associated with the treatment
• Original discharge summary from the hospital
• IOL sticker and invoice for implantation claims (e.g., knee replacement, cataract)

5️⃣Complete the claim form Next, you need to fill in all the necessary details in the claim form and submit it along with the relevant documents to the insurer.

6️⃣Submit the relevant documents When you submit the documents, ensure you  include any pre/post-hospitalisation bills, prescriptions, and reports that you have incurred along with your hospitalisation bills. This will help ensure that you don't overlook any eligible expenses.

7️⃣Ask for an acknowledgement  Ensure you keep a copy of all the documents you give to the insurance company. Get an acknowledgement from the insurance company or TPA on the original documents you submit.

8️⃣Track the claim process After submitting your claim, it's important to stay in touch with your insurer to track its progress. Once received, the claim will be thoroughly reviewed. Additional information or documents may be requested, and you should promptly submit them.

9️⃣Review the claim settlement summary Once the verification process gets over, the approved amount will be transferred to the bank account you provided. You will receive a settlement summary that shows all the deductions made. Please review the deductions in the summary carefully, and if you have any questions, don't hesitate to contact your insurer for clarification.

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Things To Consider Before You Buy Health Insurance

Finding the perfect health insurance plan for your family is no easy feat. You'll need to carefully select features that suit your current and future needs. Here is a checklist for you to consider before buying health insurance.

✔ Adequate coverage for old age: As you grow older, your healthcare needs may increase. Therefore, it is essential to opt for a health insurance plan that offers sufficient coverage for medical expenses for future.

✔️No Room-rent limits or capping: It is crucial to check whether the health insurance policy you are considering has any restrictions on room rent. Having no limits or capping on room rent ensures that you have the freedom to choose the hospital and room type that best suits your requirements.

✔️Covers 'all' day care procedures: Some medical procedures do not require a stay in the hospital but still fall under the category of day care treatments which can be carried out at home. Make sure that the health insurance policy covers all such procedures, so you are not left with unexpected out-of-pocket expenses.

✔️Covers organ donor costs without limits: In case of an organ transplant, there can be significant costs associated. Look for a health insurance plan that covers these costs without any limits, ensuring comprehensive coverage for such critical procedures.

✔️Coverage for non-medical expenses: Consumables/non-medical expenses like gloves, masks, and so on are often not covered by health insurance plans. Choose a policy that includes Non-medical/ consumables coverage to cover these expenditures, since they can account for a large amount of hospital bills, making it a worthwhile addition.

✔️No co-pays: Co-pays refer to the portion of the approved claim amount that you have to bear out of your own pocket. Opting for a health insurance policy with no co-pay means that you won't have to worry about additional financial burdens when seeking medical treatment.

✔️No caps on treatment costs for specific conditions: Certain medical conditions may require expensive treatments. Check if the health insurance plan has any caps or limits on the coverage provided for specific conditions, as this could impact your ability to access necessary treatments.

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Understanding how health insurance works is crucial for your financial and physical well-being. By familiarising yourself with the basics of coverage, premiums, deductibles, and out-of-pocket expenses, you can make informed decisions about your healthcare. Remember to carefully review policy terms and conditions, seek clarification when needed, and compare different insurance plans to find the one that best suits your needs.

Get peace of mind with health insurance, knowing you're covered for unexpected medical costs. Take charge of your health and future by getting the right insurance today.

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Note: Earlier, a pre-existing disease was any disease or condition that was diagnosed, treated, or sought medical advice in the last 48 months. This has been changed to 36 months, from 1 April 2024. The maximum waiting period for pre-existing and specific diseases has also been reduced to 36 months from 48 months.