When a health crisis hits, how your insurance processes the claim can make all the difference - both to your treatment experience and your family’s peace of mind. In India, policyholders generally have two ways to settle hospital bills: cashless hospitalisation and reimbursement claims. Each serves a different need, and experts say a truly effective health cover is one that offers both without compromise.
What IRDAI Guidelines Say
As per IRDAI guidelines, insurers must approve cashless authorisation within one hour of receiving the request and complete the final settlement within three hours of discharge approval, failing which they must bear any additional hospital charges for the delay. In FY 2023-24, insurers processed about 3.26 crore health claims, settling 2.69 crore (82.46 per cent), rejecting 11.18 per cent - mostly due to policy exclusions - while 6.36 per cent remained pending at the end of the year.
Why Cashless Has Become The Default For Many?
In a cashless arrangement, the insurer settles the bill directly with the hospital, provided it’s part of the network. The patient doesn’t have to arrange funds upfront, which is especially critical during emergencies or planned surgeries.
“Cashless hospitalisation is often seen as the more convenient option. It allows the insured patient to receive medical treatment without paying out of pocket, as the insurer settles the same directly with the hospital,” said Manish Dodeja, Chief Operating Officer, Care Health Insurance.
“It takes away the stress of arranging funds during medical emergencies for the family, ensuring seamless access to healthcare thereby letting the patient and their family concentrate on recovery while the insurer takes care of the rest. With an expanding network of cashless healthcare providers and digital approvals, the process has become the go-to route for many,” he further added.
Where Reimbursement Still Matters
Reimbursement claims come into play when treatment happens at a hospital outside the insurer’s network, or when cashless processing isn’t possible. The patient pays the bill upfront and later submits the documents for settlement.
According to Dodeja, reimbursement claims offer critical flexibility to individuals, as they allow them to receive treatment at a hospital of their choice, even if it's outside the insurer’s cashless network, and claim the medical expenses later.
"This becomes important in smaller towns, during emergencies, or in cases where specialised care is only available at a particular non-network healthcare provider,” Dodeja said.
Both methods have distinct strengths. Cashless offers speed, less paperwork, and no upfront payment, while reimbursement gives freedom to choose any hospital.
“Ideally, a comprehensive Health Insurance should support both seamlessly,” said Dodeja, adding that individuals should have a thorough understanding of their healthcare needs, preferred hospitals, and likely health insurance utilization scenarios before choosing a plan that aptly fits their needs. ”
What Consumers Should Look At
- Network Strength: Check if your insurer’s hospital network covers facilities in your city, hometown, and places you frequently travel to.
- Claim Process Efficiency: For reimbursement, understand the required documents and average settlement timelines.
- Emergency Readiness: Ensure your policy works equally well for planned procedures and urgent admissions.
The smartest approach is to have both ready, so you get timely care without financial strain, whether you’re in a metro hospital or a small-town clinic.
