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Find Out How Does Health Insurance Works

Buying a health insurance plan​ is one of the smartest decisions you can make.

It saves you on the day your medical bill shows up if you ever get hospitalised, which is never out of the question since injuries and sickness can happen out of the blue.

If you're still wondering whether to buy one, let this blog post explain how health insurance works to make your decision easier.

How does medical insurance work?

Health insurance is an agreement between two parties, the policyholder (that's you) and the insurer (or the insurance company). In this agreement, the insurer agrees to pay your medical expenses mentioned in the policy if you ever get hospitalised. In return, you're expected to pay a premium, which is the amount to buy the policy.

Health insurance plans also provide multiple add-ons to give you extra benefits. You can get these benefits added to your policy by paying an additional premium.

Here is a list of a few examples of health insurance add-ons:

1. Double Cover: provides an extra 100% Sum Insured (that is your coverage amount) in case you exhaust it for claims in a particular policy year. 

2. Maternity and Newborn baby cover: covers expenses related to childbirth and treating newborn babies. The newborn cover also includes expenses incurred on vaccinations. 

3. Global cover: this add-on covers you for hospitalisation expenses that you incur outside India. 

4. OPD cover: OPD cover, or Out-Patient Department cover, covers you for expenses you incur in the OPD like consultations and diagnostic tests. It also covers costs for medicines prescribed by the specialist doctor you visit. 

Note: Please read the Policy Wordings to understand each add-on offered. 

Health insurance coverage

Furthermore, another step to understanding how health insurance works is to understand what is covered in your policy. 

Here's a broad list of what a health insurance policy covers: 

1. In-patient care (includes room rent, nursing charges, ICU charges, medicines, drugs, etc.)

2. Special treatments like robotic surgeries, oral chemotherapy, stem cell therapy, etc.

3. Pre and post-hospitalisation expenses

4. Daycare procedures

5. Domiciliary hospitalisation

6. AYUSH treatments

7. Emergency Ambulance 

Note: Please read the Policy Wordings to understand what each health insurance plan includes and excludes. 

Understanding the health insurance claim process

How does medical insurance work when it comes to the claim process? It's an important facet to understand and it'll help you in the buying decision. 

Health insurance claims are generally processed in two ways, cashless and reimbursement. 

Cashless claims mean you don't have to pay anything from your pocket toward your medical bills. All payments are handled between the insurance company and the hospital. Also, cashless claims are available only at a network hospital of the insurer. So you have to make sure you get treated at a network hospital to avail cashless claims. 

A reimbursement claim is the opposite of a cashless claim. In a reimbursement claim, you're required to settle hospital bills first before raising a claim with the insurer. After your claim has been accepted by the insurance company, you get reimbursed for the bills you paid. 

Cashless and reimbursement claims

To summarise, here's how cashless and reimbursement claims work:

​1. For cashless claims:

  1. Register your claim by calling the c​​ustomer care number or logging into the mobile app.
  2. Submit all relevant IDs and medical documents required by the claims team.
  3. Once your claim is accepted, the claims team will take care of all the bills directly with the hospital. 

2. For reimbursement claims

  1. Register your claim by calling the customer care number or logging into the mobile app.
  2. Update the claims team regarding the type of treatment you're getting, the start date, etc.
  3. Clear all your medical bills with the hospital.
  4. Submit all the original documents with the claims team within 7 days of getting discharged from the hospital to claim your reimbursement.

Conclusion

Ultimately, understanding how health insurance works is a matter of knowing the principles that insurance is based on. Insurance, after all, is a tool that protects you from financial losses that occur from unforeseen risks like illness or accidents. 

It's also the best way to ensure that getting the best healthcare for you and your loved ones does not leave you severely lacking in funds for the future.​