If you have had a conversation about health insurance plans with your health insurance agent or a health insurance expert, there’re a couple of questions that pop up:
“Will my health insurance plan have a reimbursement facility or a cashless one?” or
“Which health insurance payment option is best for me - reimbursement or cashless?”
Well, the answer to these questions gets revealed below. Read on to know the differences between the two channels of claim settlement across health insurance plans and which of them should be the perfect suit and would cater to your financial security.
Comparing Reimbursement vs Cashless in Health Insurance Plans
People call it the “wealth of health.” However, just like in the case of any financial account, health also gets derailed sans much prior warning. And you are suddenly facing a 2-sided sword: finances and health issues. Your health complications lead to urgent hospitalisation and other medical requirements, which destabilises your finances substantially. And that’s why individuals opt for health insurance policies!
However, when it comes to health insurance plans, there’s a constant doubt about which is better - reimbursement or cashless. This choice is what makes all the difference during the claim process.
While in some cases (read during hospitalisation in non-partner hospitals), there is no choice (because one HAS to go for the reimbursement process), in some cases, there are choices that the insured individual gets to make. Since availing of the best health insurance plans is a valuable step towards safeguarding one’s finances during times of health hazards, such decisions must be made after careful consideration of both the options: reimbursement and cashless and gaining a better understanding of the differences between the two -
| FACTORS | Reimbursement in Health Insurance | Cashless Mode in Health Insurance |
|---|---|---|
| DEFINITION | Reimbursement in a health insurance plan is when the insured individual pays their hospital and/or any medical bills out of their pocket initially, and later raises a claim with their insurer to disburse the claim amount to their accounts. | The cashless mode of repayment in health insurance policies is when the insured individual can just offer their health insurance ID after hospitalisation or any medical treatment and the health insurer pays the billed amount to the hospital directly. In this case, the insured individual need not pay out of their pockets (provided They haven’t exceeded their room rent restrictions, or Their billed amount hasn’t exceeded the sum insured, or They don’t have a copayment clause in their policy. |
| WHEN IS THE OPTION OFFERED? | In the case of both partner and non-partner hospitals. | In the case of partner hospitals only. |
| TIME CONSUMED FOR THE CLAIM SETTLEMENT | Reimbursement in health insurance policies involves a long list of document submissions and cross-verification of the same with the concerned hospital desk. And all of this with no serious time restrictions considering that the insured has already cleared the bill out of their pocket. Naturally, the claim settlement process gets extended. |
The cashless repayment channel in health insurance plans requires medical treatment invoice submissions and verifications regarding the same from the end of the health insurer or the Third Party Administrator (TPA). However, since the cashless mode doesn’t involve the role of insured individuals, the entire claim settlement process is much faster. |
| CLAIM PROCESS | The insured individual offers an intimation about the hospitalisation to the health insurer or the TPA during or immediately after the treatment is done. He/She pays off the hospital bill from their pocket. Collect all the invoices for the treatment being done and later submit them to the provider. Fill in the necessary health insurance form. Now, wait for the provider/TPA to cross-verify the details with the network/non-network hospital and then reimburse the billed amount. |
An insured individual informs the health insurance provider about imminent or immediate hospitalisation in a network facility. Submit the health e-card and insurance policy number to the hospital desk. Fill up the insurance form and submit it to either your TPA or directly to the insurer. Post-generation of the hospital invoice, the health insurer will be informed about the bill generated and the amount will be settled by the provider. |
| CLAIM APPROVAL REQUIREMENT | Considering that the insured individual is sure that the medical treatment he/she will undergo is covered by the policy he/she has availed, no prior intimation has to be sent to the insurer/TPA regarding the claim. | In the case of cashless mode, the insurer/TPA needs to be informed beforehand, preferably within 72 hours. In the case of emergency hospitalisation, the approval for the cashless claim needs to be made within 24 hours of hospitalisation. |
Now, both these modes of repayment come with their pros and cons. Take a look at each of these before you make a decision -
Pros and Cons of the Reimbursement Process in Health Insurance Policies
| PROS | CONS |
|---|---|
| Need not worry about which hospital to approach Whether you are at a partner or a non-partner hospital, reimbursement is always an option. This option comes in handy especially, in the case of a medical emergency, when one does not have the time to seek a network hospital. Thus, the only option left is of reimbursing the hospital invoice. |
Expect a delay in your claim settlement process The reimbursement mode of payment means the insurer is in no hurry to settle the claim. Moreover, the cross-verification of the documents and invoices takes forever. So, naturally, there is an extended timeline involved. |
Pros and Cons of the Cashless Process in Health Insurance Policies
| PROS | CONS |
|---|---|
| The claim settlement process is a hassle-free progression With less number of parties involved, plus payment with a time-bound situation makes cashless mode a hassle-free claim settlement process. Financially motivating option This caters to one’s financial security by ensuring that insured individuals do not require spending a penny out of their savings towards meeting health treatment requirements. After all, this is the major purpose behind people availing of insurance plans from the best health insurance providers across the country. |
Network hospitals are your only way to cash into the cashless facility If you are looking at an emergency medical situation, cashless wouldn’t be your option. You will be stuck with the reimbursement option considering that in an emergency, you cannot prioritise looking for a network hospital during emergency medical treatment. |
Ask any health insurance expert and they’ll tell you, that the cashless mode comes up as an undefeated contender every time, against reimbursement. It is financially beneficial and makes sure that you stay focused on recovering rather than arranging for the hospital bill that will be directed toward you after a medical procedure.
Now, obviously, cashless is an ideal option to have. After all, the benefits that it offers are equivalent to the reasons why individuals avail of health insurance plans in the first place. However, not all situations are ideal, and parallelly, insured individuals do end up having to choose the reimbursement option despite having chosen the cashless mode. Do take note of these cases and try to avoid them at all costs!
When does the Reimbursement Mode in Health Insurance Policy become the Only Option?
CASE 1: If the claim is raised after the preset timeframe/deadline.
Usually, health insurers prefer that you inform them or their TPA 2-3 days prior about the medical procedure that you are about to undergo. However, this cannot be possible in the case of emergency hospitalisation. But, in the case of the latter, there is a 24-hour (may vary from one insurer to another) window to inform the health insurance provider about the emergency circumstances.
In case you exceed either of these timeframes, insurers are reluctant to offer you the cashless mode option and you are left with only one option - reimbursement.
CASE 2: If the initial treatment/procedure is not covered under the policy, but the follow-up ailment is.
Multiple health insurance plans come with certain illness exemptions, i.e., they do not offer coverage for certain ailments (pre-existing/diagnosed later). However, such ailments may lead to certain other diseases as a side effect of the initial medical condition. And it may be that your health insurer offers coverage for these later ailments.
In such cases of medical complications, the health insurance provider wants to wait out and offers only reimbursement as a mode of claim settlement.
CASE 3: If you have approached a non-network hospital
One of the most common use cases for mandatory reimbursement claim settlement is when an individual approaches a non-partner hospital for medical treatments. In cases of emergency, you cannot realize prioritise searching for partner hospitals over getting immediate medical attention.
Conclusion
So, in a nutshell, cashless or reimbursement modes of repayment aren’t choices that you make. The emergency of the medical situation at hand makes that decision for you. However, given an option, going cashless always caters to your financial safety goals by securing your savings. Additionally, the cashless mode also makes you financially stress-free since you need not worry about the payment of hospital bills during a time of medical emergency and can just concentrate on recuperating and recovering.