Personal Finance: A Brief Note on Cashless Treatment at any Hospital

The general and health insurance companies (insurers) have planned to offer 100% cashless treatment across the country from January 25, 2024 onwards.

The Insurance Regulatory and Development Authority of India (IRDAI) has initiated the move, which is anticipated to provide a fillip to insurance penetration in the country and ease the claim process of policyholders and hospitals. This would avoid delays and disputes normally witnessed during the phase of reimbursement.

As per the ‘Cashless Everywhere’ system, the policyholder can get treated in any hospital of their choice without paying any amount, and a cashless facility will be available even in case this hospital is not in the insurance company’s network. So, the policyholder can get admitted to any hospital without paying any advance money, and insurers will pay the bill on the discharge day.

As per the General Insurance Council, a body of general insurers that is a coordinating member under the ‘Cashless Everywhere’ system, the customer should inform the insurer at least 48 hours before admission.

About 56% of the health claims were settled through the cashless route during the fiscal 2022-23, as per the IRDAI Annual Report.

Presently, the cashless facility is available only at hospitals where the respective insurer has an agreement or tie-ups. In case the policyholder chooses a hospital without such an agreement, the cashless facility is not offered now, and the customer has to go for a reimbursement claim. This leads to further delay in the claim process and leads to disputes. Moreover, policyholders in rural and semi-rural areas often face difficulty in gaining access to network hospitals for cashless facilities.

It is anticipated that the ease of claims settlement without burdening the policyholders financially will prove to be a win-win situation for everyone, including hospitals, the general public and insurers. The policyholders will gain as they won’t have to shell out money during the treatment period, depending on the policy terms.

Under the cashless system, insurers will pay up to the amount taken as a sum assured in the policy. In case the sum assured is Rs 5 lakh, insurers will pay the hospital up to Rs 5 lakh during the year.

In the case of some illnesses, there’s a waiting period of two or three years before the insurance coverage is applicable. Customers are required to read the policy documents carefully to understand the waiting periods and pick the plan with the least waiting period and those which cover the maximum number of illnesses.