Using Your Health Policy Right

This story was first published in Financial Chronicle on May 2, 2016.

Having a health insurance policy for yourself and your family/ dependents is a crucial aspect of life. But your responsibility does not end at purchasing one and paying yearly premiums. You must exercise caution not just while purchasing a suitable policy but also understand the clauses, terms and conditions of utilization. One need only ask the next-door neighbor of the hassle they have had to experience while filing a claim because they were unaware of a clause.

Here are a few pointers on how the claims process can be made simpler for a policyholder:

Knowledge is power: Policy documents employ jargon and concepts that might confuse you at first but be sure to ask questions. For example; some policies do not cover or reserve a small percentage for non-medical expenses such as room rent, clothes, food, etc. Anything above the prescribed percentage will be chargeable to you. Do note that when you are utilizing your corporate policy, the more expensive a room you opt for, the cost attached to treatment is also charged accordingly. 

Understand how the policy can be used cashless: Insurance companies or TPAs also enable you to use your health insurance policy cashless if you go to a hospital prescribed by them. To find out where you can use your policy for a cashless treatment, check the list of network hospitals published on the website. Cashless health insurance reduces the financial burden typical of healthcare needs as the patient does not have to pay up cash upfront, the hospital and the payer settle the bill with a small co-payment percentage paid by the patient at discharge. 

Understand the clauses: All health insurance policies come with clauses such as the list of diseases that it will not cover. Some policies don’t cover non-medical costs or allot only a small allowance for some of the non-medical costs. For example; pre-existing diseases, and diseases or illnesses resulting from alcohol or drugs are not covered, cost incurred for spectacles and hearing aids also may not be covered. Make sure that you have and understand the full list of clauses for your policy.

Ensure there is co-payment: At first you may think that having the insurer pay the entire amount is better, as a policyholder, you paying a small percentage (usually between 10 and 20%) makes more sense. Apart from making a difference to the premium you pay, co-payment ensures that you also take ownership of the costs incurred, and ensure that you are billed correctly. It encourages honest and judicious use of the policy and the fact that you have to pay some amount from your own pocket will ensure that you use the policy right.

Be smart: You must be judicious about using your policy. Before you use your policy for less serious illnesses, know the impact it will have on your yearly premium. Every year, the premium is calculated basis the usage of the policy. If you use your policy to make small claims, the premium will increase significantly, thus, making very little financial sense. Also, several payers incentivize no usage of policy by increasing the sum insured, discounts on premiums, etc. Make sure you do the math right.

Conclusion: Diligence starts from something as simple as having a folder with important documents ready where they are accessible at all times. As an added measure, you can also ensure that you e-copies of all necessary documents on your phone or tab to keep it handy. The responsibility of appropriately utilizing the policy lies as much on your shoulders as much as it lies on the adjudicator’s shoulder to adjudicate the claim rightfully. Hence, you must do your part right to ensure that the process is smooth and transparent.

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