What You Must Know About Cashless Claim

If the cashless request is denied, the entire cost may need to be paid for planned treatments.

A recent survey by Policybazaar.com found that many people with health insurance policies face challenges when denied the cashless facility and forced to make upfront payments at hospitals.

About 70 per cent of reimbursement claimants reported taking loans from formal or informal sources or dipping into savings meant for other life goals.

• You can post your health insurance related questions HERE

When is cashless not available?

One scenario is when the patient seeks treatment at a hospital that is not part of the insurer's network.

The Insurance Regulatory and Development Authority of India (IRDAI) recently launched the 'Cashless Anywhere' facility but it is in its infancy.

Another scenario can arise even at a network hospital.

"If the policy was purchased recently and a claim for a major disease arises, the insurer would want time to investigate. It could ask the customer to file for reimbursement," says Siddharth Singhal, business head-health insurance, Policybazaar.com.

In a reimbursement claim, the patient may have to deposit either the full cost of treatment or a part of it. If the cashless request is denied, the entire cost may need to be paid for planned treatments.

Sometimes, the insurer provides a cashless claim for a certain amount, but additional expenses arise later. The patient then has to pay the extra amount out of her pocket.

In emergency treatments at non-network hospitals, the patient may have to make an initial payment upon admission, additional payments during treatment, and a final payment at discharge.

Swipe card, explore loan options

In an emergency, use your credit card for the initial payment.

"It provides an immediate and assured line of credit, with no documentation required," says Adhil Shetty, CEO of Bankbazaar. You may then get a day or so to raise additional funds.

The downside of a credit card is the high interest cost if you cannot repay the amount in full and need to either revolve credit (2 to 3.5 per cent per month) or convert the balance to EMIs.

Your next option could be a personal loan.

"It is usually the fastest option. If you have a salary account, you may even have a pre-approved loan facility," says Shetty.

A gold loan is another option. Besides being cheaper than a personal loan, it offers flexible repayment options. Go to a regulated entity to avoid exorbitant interest rates.

Also consider a loan against a fixed deposit. "The interest rate would be a couple of percentage points above the FD rate," says Shetty.

Alternative online loan providers offer quick loans.

"But they are very costly, with interest rates ranging from 24 to 36 per cent. The speed of obtaining these loans is offset by their high interest rates," says Vishal Dhawan, chief financial planner, Plan Ahead Wealth Advisors.

Plan for medical emergencies

Keep some emergency cash at home, especially if there are senior citizens. Also, ensure your credit card limits are adequate.

Set aside a healthcare fund of Rs 3 lakh to Rs 10 lakh, depending on your city and hospital options.

"Keep this money in accessible instruments, such as a liquid fund, or a flexi-FD account that breaks an FD when needed and transfers money to your savings account," says Dhawan.

A family member should know the PIN for credit and debit cards in case the cardholder gets incapacitated.

• You can post your health insurance related questions HERE

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Feature Presentation: Ashish Narsale/Rediff.com