How does health insurance work?

Posted by neha sharma on May 8th, 2019

Health insurance is a policy which covers a whole range of expenses that the insured persons may incur while availing medical treatment, whether for hospitalization or otherwise. Health insurance may be mediclaim which will only cover the cost of hospitalization, or be a comprehensive health insurance which covers other costs such as daycare procedures, ambulance charges, pre and post hospitalization spends, diagnosis spends, doctor or specialist consultation fees etc.

Depending on the policyholder’s requirements, a health insurance policy can be bought. Health insurance can cover an individual or cover an entire family. Policies that cover more than one person are called floater policies. Sometimes, opting for floater policies may lead to a lower premium amount as compared to individual policies.

Health insurance policies have a sum insured which means that any expenses or claims up to the particular limit will be paid out. In case the costs of hospitalization exceed that limit, the amount over and above the sum insured will have to be paid by the policyholder. That is why it is essential to choose the sum insured in such a way that it will adequately cover the needs of the people insured.

What does health insurance policy include?

Health insurance policy generally includes reimbursement of hospitalization expenses. This includes:

• Cost of procedures performed such as surgeries
• Room rent
• Consumables
• Cost of equipment used during surgery
• Diagnosis costs and costs for different tests
• Pre and post hospitalization spends
• Ambulance charges

Depending on the insurance company and the policyholder’s requirements, other costs of healthcare may be included. For example, for women policyholders, insurers generally have policies that cover the cost of specific cancers and surgeries that women may have to undergo, for example cervical cancers, hysterectomy etc.

Health insurance plans specific to women also cover maternity expenses such as delivery charges, room rent, doctor’s consultation fees etc. This is an option married women can opt for so that the costs of delivery are met by health insurance.

However, health insurance plans generally exclude any pre-existing diseases. To get these confirmed, insurance companies ask for a medical check up at the time of purchase of the policy. To include these items in the health insurance policy will mean a substantial rise in the premiums. However, it is important to disclose these diseases to the insurance company so that any future problems or denial of claim are avoided.

What to do in case of hospitalization?

In case of any hospitalization, the first thing to check is whether there are any network hospitals of the insurance company. Network hospitals are those that have a tie up with the health insurance company. In case of hospitalizations in these establishments, you can opt for cashless treatment. This means that the insurance company will directly settle the medical treatment costs with the hospital subject to the ceiling in the policy. Any amount above will have to be paid by the policyholder.

Some of the documents required for raising a health insurance claim are:

1. Hospital bills showing a break up of the different items charged
2. Letter from the doctor stating the procedure performed with an estimate of the costs
3. Bills for ambulance, pre hospitalization expenses and post hospitalization expenses to the extent allowed under the policy

Some health insurance plans require a claim to be raised through a Third Party Administrator (TPA) in which case all the documents will have to be submitted to the TPA along with the claim form. The TPA will submit the same to the insurance company to get the claim processed.

Health insurance plans are a necessity in today’s times. Don’t miss out on getting coverage for you and your family.

Author bio:

Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about health insurance. Through her work, she has explained how the policy works