Know Everything About How Health Insurance Claims Work in India


7 min read

Updated on Aug 23, 2023

The best thing about health insurance – a policyholder’s right to make claims for healthcare costs to the insurer. Here we discuss everything about the claim-making process, the types of claims there are, and how they can help you in case of a medical emergency.

The whole purpose of buying a health insurance policy is that it allows you to cover your medical costs when you need to undergo a treatment at the hospital. This means that you don’t need to burn a hole in your pocket with expensive treatment costs and ever-rising doctor visits and tests, each time you’re diagnosed with a health condition. Your health insurance company takes care of that for you. How? By settling something called a claim in health insurance.

Here we will talk all about health insurance claims. But first let’s refresh our understanding of a health insurance plan and its importance for you and your loved ones.

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What is Health Insurance?

In simple words, a health insurance is a policy document stating that the insurance company would cover all or a large chunk of the healthcare costs for the policyholder (person buying the policy) in return for a premium. This premium amount needs to be paid by the policyholder to the insurer on a regular basis in order to avail the benefit of cost coverage.

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Why Do You Need to Buy a Health Insurance Plan in India?

There is more than just one benefit of buying a mediclaim policy or health insurance. Here are some of them:

  • It helps secure your family’s future: The health and wellness of all the members in the family is of utmost importance – right from the kids to the elderly at home. When any one of them falls sick, there is bound to be costs involved, sometimes a little higher, depending on the condition diagnosed. In the case of senior citizens, the frequency and cost of availing treatment both can be high. By purchasing health insurance for your entire family, you can easily protect their future health and also your savings.
  • It’s a great help in chronic or critical health conditions: With lifestyle changes, a number of young people are being diagnosed with critical, sometimes chronic, health conditions. The treatment for these conditions is prolonged and sometimes even expensive. In such cases, getting health insurance helps provide coverage for high costs involved, ensuring that you get the best treatment for faster recovery.
  • It helps save your savings: When you’ve been saving up every month from your hard-earned money for a better future, you wouldn’t want to spend it all up in one go at one medical emergency in the house. This is where health insurance can help. It would help take care of all healthcare costs involved in the treatment process, sometimes both before hospital admission and after (post-discharge care), so that you can only focus on the most important thing at the time – taking care of your health.
  • It helps provide assurance amid ever-rising medical costs: Inflation impacts every industry every year, and the medical sector is no exception to that. With inflation comes a price increase in all consumables and services offered by the industry and healthcare can become simply unaffordable for a lot of people in the country.

But with health insurance plans for family, this problem can be put to rest. All you need to pay is a small premium amount (as per your convenience), which is easily affordable, and then your mediclaim policy will take care of the huge treatment costs when the need arises.

Health Insurance Claim: How it Works?

The whole point of purchasing a mediclaim plan is that you can ‘raise a claim’ with the insurance company for the costs covered or to be covered during a medical emergency. As part of the health insurance policy, your insurer promises to cover your medical costs in return for a regular premium payable towards the plan.

There are generally two kinds of medical claims that can be raised in health insurance:

  1. Cashless claims
  2. Reimbursement claims

Both work differently so it’s important to understand both.

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1. Cashless claims: These are the easiest and the most convenient option when it comes to getting your healthcare costs covered under health insurance. As the name suggests, cashless implies that you can get your entire treatment at a hospital without paying a single penny from your pocket!

Note that cashless claims only work when there is a medical emergency involved and the policyholder needs to be admitted to a hospital for care. Also your insurer would provide this benefit only in case of certain medical conditions, so it is always a good idea to check your policy document carefully for the illnesses/diseases covered under cashless claims at the time of purchase.

Now how cashless claims work is that your insurance company has a tie-up with a wide network of hospitals in the country. This is done to provide maximum advantage to the policyholder to choose any hospital during an emergency, depending on where they are at the moment. At any one of these network hospitals, you can choose to get admitted and receive complete treatment absolutely free of cost under the cashless claim benefit of your health insurance plan. At the time of discharge, the hospital would settle the bill directly with your insurer. This means no hassle at all for the policyholder.

Raising a cashless claim with the insurer is seamless and hassle-free process involving the following steps:

  • During a medical emergency that involves hospitalization, select any one hospital from the list of network hospitals provided to you by your insurer at the time of buying the health insurance policy.
  • The insurer needs to be informed as soon as possible of the situation. Your insurance company would ask you to submit a pre-authorisation form which is available at the insurance desk of the chosen network hospital. Complete the form and submit it at the insurance desk.
  • Upon receipt of the form, the insurer will review the claim.

2. Reimbursement Claims: This is different from the cashless claim option such that under this option, the policyholder pays for the treatment cost involved in hospitalization from their own pocket first and then later raises a claim with the insurer to reimburse the amount.

This is therefore not a very smooth and hassle-free process like the cashless claim benefit, involving time and energy both until your paid amount can be reimbursed from the insurer. However, the only advantage is that you are not restricted to choose only a network hospital; you may opt for any hospital for treatment.

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How to Raise a Reimbursement Claim with the Insurer:

Here’s the procedure for submitting a reimbursement claim to your insurance company:

  • Your insurer would require you to submit a list of documents at the time of filing the claim. These include a duly filled and signed claim form (collected from the insurer or online from their website), all original bills at the hospital, discharge certificate, summary report, bills for pharmacy, other receipts of any service used during hospitalization, and the case file of the condition for which the treatment was availed. Note that all these documents must be signed by your doctor at the hospital.
  • In case of hospitalization due to an accident, a copy of the FIR also needs to be submitted to the insurance company.
  • The insurer would review all the submitted original documents and assess the claim made. In line with the coverage provided as part of your health insurance plan, the company would then begin the reimbursement process.

Summing Up

Health insurance claims largely help a patient or policyholder to go ahead with availing the best treatment for their condition during hospital stay in emergencies. They also need not worry about shelling a large amount of money from their pocket since a large chunk of it is either going to be paid for by the insurer or reimbursed later. Hence, the patient can only focus on the recovery process without a worry on their mind.

However, it is important to choose the best health insurance in India with a credible health insurance claim settlement ratio. This is the company’s repute in the market for the number of medical claims settled over the past one year. If the insurer has the best claim settlement ratio in health insurance in comparison to other companies, you can safely go ahead with buying your mediclaim plan.

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Sep 19, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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