Cashless vs. Reimbursement Hospitalization in Health Insurance

The trail of life is similar to a huge rollercoaster that goes through ups and downs, one cannot deny the fact that it is super fun but at the same time extremely unexpected. In order to counter the strokes of uncertainties, the best tool is insurance. Different types of insurance plans are designed and developed to take care of the distinct needs of the customers.

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    When it comes to medical emergencies, there are a plethora of health insurance plans in India that offer coverage against the expenses incurred in the treatment of the covered member to a pre-defined limit. The most important aspect of purchasing the best health insurance is the coverage it offers in real-time. Now, the concept of coverage might appear to be simple from the outside, but it has a bundle of nuances and gradations when understood deeply.

    In order to understand the coverage offered by health insurance plans, first, we will have to decode cashless and reimbursement hospitalization. Both these terms are synonyms to health insurance claims but at the same time are quite different from each other.

    If you are unable to decide which one to opt for or which one to go for while filing a health insurance claim, you’ve landed at the right place. In this article, we will decode coverage offered by health insurance plans and provide a deeper insight into the pros and cons of both claim processes respectively.

    Cashless Hospitalization

    Just like any other industry, the health insurance sector has progressed and undergone a series of transformations as a part of evolution. The concept of cashless hospitalization came into the picture as a result of these evolutionary alterations. Back in the time, most of the health insurance claims were paid by the provider in the form of reimbursement on the basis of documents and proofs presented by the policyholder or the claimant.

    However, later considering the factors of client satisfaction and comfort, health insurance providers started coming up with the concept of cashless hospitalization. This turned out to be quite different from the conventional forms of paying the claim and started gaining popularity amongst customers quickly. With more and more customers wanting to opt for cashless hospitalization other health insurance providers started coming out with it.

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    In the case of cashless hospitalization, the policyholder or any of the covered member under the health insurance plan in India can seek treatment without making payment in the form of cash or digitally. To keep it simple, cashless hospitalization allows patients to obtain medical care and attention at a network hospital without having to make a payment.

    The insurance provider has a network of medical institutions that are partnered to provide cashless treatment to their customers and the payment is made by the provider based on the limit of the health insurance plan in India. This feature of mediclaim policies not only makes it convenient for the policyholder to seek treatment but also makes the situation simplified for the provider while settling the claim.

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    Reimbursement Hospitalisation

    Contrary to the feature of cashless hospitalization, reimbursement is older and common in the case of most of the plans and providers. Unlike the first mode of coverage, here the policyholder is supposed to pay for their medical expenses initially and later apply for the repayment by the provider based on the bills and invoices.

    Almost every health insurance plan in India offers coverage via reimbursement as it is not restricted to network hospitals. Customers and policyholders can opt for the feature of reimbursement at any hospital without worrying about the network or partnership between the provider and medical institution.

    In order to obtain the reimbursement of the medical expenses incurred in the treatment of the covered member, the claimant needs to provide a relevant document depicting the expenditure. The main documents required are as follows-

    • Discharge Summary 
    • Invoices and Bills 
    • Medical examination reports 
    • Doctor’s Prescription
    • Medicine and surgical bills
    • Hospital expense bills

    Once you inform your provider and submit the relevant bills along with the claim form, they will investigate your claim and process it before reimbursing the funds. In case of any discrepancy, the provider might examine and ask the claimant to submit more documents to prove the claim.

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    Cashless Hospitalization vs. Reimbursement

    In terms of ease, comfort and the time frame required, cashless hospitalization has an edge over reimbursement. This is mainly due to the fact that one doesn’t need to worry about the payment and quality of treatment and all they need to look for is a network hospital that offers cashless hospitalization.

    On the other hand, when it comes to reimbursement there are pros and cons at the same time. Firstly, for reimbursing the expenses, one needs to pay them initially which might turn out to be a burden at first. However, one can claim the expenses from any hospital be it a partnered one or not which is an advantage.

    In a Nutshell

    A health insurance plan in India is an absolute must to build a secure future for you and your loved ones. While choosing health insurance make sure you indulge in proper research and analytical comparison to get the right plan at the right price. Furthermore, try and choose a plan that allows the user to file a claim in both ways as it would make things simpler and convenient.

    Written By: PolicyBazaar - Updated: 29 July 2021

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