Have you ever been in a situation when a policy that covers a few lakhs of hospital costs did not even cover claims worth Rs10,000? While it is easy to push the blame on companies that cheat, it is most often incorrect understanding of the health insurance policy that is at fault. Though reading of the complicated policy document looks difficult, it makes sense to understand a few key terms to ensure a better medical experience.
Here are 10 terms you must understand to get the best out of your policy. Sit down with the agent to understand what these mean. Write it down. Mail it to the company by registered post with a note saying that this is what you understand about your policy. In the event of a dispute, you would have your due diligence in place. Most companies when faced with educated customers give better products and services.
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The biggest part of your policy, this covers expenses such as room rent, surgical procedures, nursing expenses, doctor’s fees, cost of medicines and diagnostic tests. However, most policies specify the extent to which they will pay for certain services, such as ambulance charges, room rent and day care treatment.
What you need to check urgently is the day-care coverage. Procedures, such as cataract and tonsillectomy, don’t need an overnight hospital stay. Check if your policy will cover (and to what extent) an under 24-hour stay. Says Shreeraj Deshpande, head (health Insurance), Future Generali Insurance Co. Ltd: “There are about 130 day-care procedures as a result of advanced medical technology and are covered. The customer should go through the list to know what is covered.”
Also, check what your sub-limits are. A sub-limit breaks the sum insured into smaller fractions. For instance, in some policies, there is a cap on the room rent that the insurer will pay. Anything over that will have to be borne by you. These sub-limits may also be applicable to certain diseases.
Pre & post hospitalization
A basic health insurance policy usually covers doctor’s fees, expenses on medicines and diagnostic tests that one, typically, incurs before planned hospitalization and for three months after hospitalization. But you need to check the limit on this expenditure as it differs from policy to policy.
These are diseases or symptoms of diseases that exist at the time of taking a new health insurance policy and are excluded from policy cover.
Earlier, there was a lot of disparity among insurers in describing these pre-existing diseases and, subsequently, specifying a time period after which these diseases can be covered. The Insurance Regulatory and Development Authority stepped in last year and issued a uniform definition of a pre-existing disease. Pre-existing disease now means any condition, ailment or injury for which the insured person had symptoms and was diagnosed or had received medical treatment within four years before buying the policy. After a waiting period of four years, these pre-existing diseases would be covered.
When you buy a health insurance policy, your cover doesn’t kick in immediately. Insurers, typically, wait for a month to three months to activate your cover. During the waiting period, the insurer only covers treatment arising due to an accident, but excludes any ailment- or disease-related treatment.
An important text of the policy document, largely exclusions specify the diseases, conditions and medical services that your health policy doesn’t cover, besides the waiting period on certain diseases. For instance, any internal congenital disease is excluded permanently. Add to the list: cosmetic surgeries, dental treatment and medical consultation. Adds Deshpande: “Cosmetic surgeries that are done for aesthetical purpose are excluded. Even treatment like weight loss and alcohol abuse is excluded.”
Some other diseases, such as cataract, piles, hernia and removal of gallstones, come with a waiting period of one to two years. Some insurers may specify a sub-limit on these ailments.
This feature exists mostly in health insurance plans for senior citizens. As the name suggests, the insurer expects the policyholder to pay a part of the claim amount. For instance, if you have medical insurance for Rs2 lakh and hospitalization costs Rs50,000, your policy will only pay Rs45,000, if there is a 10% co-payment clause. Co-payment could also be on certain specified ailments. Some insurers may ask you to pay extra to waive off the co-payment clause.
Often confused with co-payment, the deductible is the limit till which the insurer will not pay; it will pay only if the claim crosses a certain limit. For instance, Health Super Surplus policy of Star Health and Allied Insurance Co. Ltd, offers a sum insured of up to Rs10 lakh, but there is no cover for any claim up to Rs3 lakh. the insurer pays for claims exceeding Rs3 lakh.
Says Deepak Mendiratta, managing director, Health and Insurance Integrated, a health insurance consulting firm: “These are, typically, top-up policies. Since they pay for claims above a certain limit and the insurer doesn’t have to entertain small claims, they are cheaper.”
Maximum renewal age
People mistake the maximum renewal age to be the maximum age at entry and assume that once a health insurance policy is bought it can be renewed for lifetime. However, insurers define the maximum age up to which they will renew your policy. Once you cross that age, the policy ceases to exist. Some insurers, such as Apollo Munich Health Insurance Co. Ltd and Max Bupa Health Insurance Co. Ltd renew for lifetime.
Cashless and reimbursement policies
Most policies are cashless, wherein the hospital gets in touch directly with the insurer for settlement of bills. You walk out of the hospital treated without paying anything. But most policies go cashless only if the hospital is empanelled with the insurer. If you go outside the network, you will have to pay for the treatment and get the bills reimbursed later.
Third-party administrator (TPA)
This is the entity who mediates between you, the hospital and the insurer to get your claim processed. His details are mentioned in the medical card that you get. Your hospital needs to get in touch with your TPA in order to get your claims rolling. Store the number of your TPA, who will also help you find a hospital empanelled with the insurer. Also, if you don’t get treated from network hospitals, you will have to follow up with the TPA for reimbursements.