Here is a list of things to do after you buy a health insurance policy. These simple steps would aid premium payment, claim application and hospitalization. This post is a companion piece: Donot forget these steps after buying a term insurance policy!
1. Understand claim procedures
Whether cashless or reimbursem*nt, insurers must be immediately intimated (within 24 hours typically) upon hospitalisation. The hospital insurance staff will help you if it is a cashless mode. You or your family should do this if you wish to pay first and then reimburse.
Find out the documents and steps necessary to intimate the insurer. Copy this information from the insurer or TPA’s website onto a word processor, print it and keep it along with the policy document and policy ID card.
Be prepared to fight for claims at any stage. Sure, the guy who sold the policy will tell you, “I will assist during claims”. This requires considerable competence to write effective rebuttals and a reputation for bringing steady “business” to the insurer. Very few sales guys can pull this off.
Develop a strong relationship with a family doctor and ensure all hospitalizations are through them or their recommended experts. This may ensure less hardship for the patient and probably help with claims. All insurers distrust hospitals. So if a treatment course only includes the necessary investigations, insurers will be happy.
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2. Recognisethat ‘cashless’ is not a right!
Health insurance comes with a right to claim reimbursem*nt. However, cashless claims are more of a privilege than a right. The insurer may either deny cashless or allow it partially and ask the insured to claim the rest of the expenses via reimbursem*nt after the hospitalisation. This implies that one may require a much bigger emergency fund than the recommended “6 months expenses”!
This is an important consideration in the case of top-up policies. We must expect them to be processed in reimbursem*nt mode only (even if both base and top-up policies are from the same insurer). Therefore sufficient liquid net worth is essential. See:Are you aware of this restriction about super top-up insurance policies?
While you must be ready to pay out of your pocket, always try to avail the cashless option. This is simpler and avoids the paperwork necessary to claim the reimbursem*nt. Also, insurers may not appreciate it if we choose reimbursem*nt for admissions in a network hospital due to suspicions of fraud etc.
3. Recognise the impact of non-medical expenses
Hospitalisation is not only about paying hospitalisation fees! There is a huge list of non-medical expenses which any patient would incur. According to United India’s TPA, “Non-Medical expenses are: Admission fees, Registration fees, gloves, blade, water bed, food & beverages, extra bed etc.,” Read more: Cashless Mediclaim: A Second Person Narrative.
Even if you believe that your corporate cover is sufficient, these non-medical expenses must be paid. Even if you believe an amount equal to 6 months’ expenses is sufficient for an emergency fund (assuming cashless would always be offered), an additional 10-15% of the health cover should be available during hospitalisations. Be mentally prepared for this.
4. Increase cover or buy a super top-up policy
Individuals with good corporate covers should at least buy individual health covers for parents and in-laws and consider an individual or large floater cover for other family members as per affordability. Of course, a private policy along with corporate cover is always the safest option.
Once this is in place, you can either increase the sum insured yearly (if the insurer would allow it) or buy a super top-up policy as per your affordability. This is the only way to protect against big-ticket hospitalizations and medical inflation.
For example, if you have a base health cover of 3L and a super top of a threshold (deductible) of 3L and cover of 10L.
Now, if you incur two claims of 4L and 3L in a single year, the base cover will only handle 3L from the first claim. The super top-up will cover 1L from the first claim and 3L from the second claim.
On the other hand, if you only had a top-up with the same deductible, it will cover 1L from the first claim only. Each claim has to exceed the deductible for the top-up to kick in, while super-top has a cumulative deductible benefit for the policy year.
In 2006, I got a United India platinum cover for 50K-1L each (self, spouse, mom). I gradually increased the cover each year, and today it has grown to 25L (self, spouse, son) and 6L for my 75-year-old mom. I made four claims (self, spouse, mom(2)).
In addition, we also have a United Super top-up plan 15L cover for all four of us with a 5L deductible. Hopefully, I will be able to increase this cover for myself, my wife and my son this year. See related links below.
- New features introduced in United India Insurance Family Medicare Policy
- United India launches Super Top Up Policy with 95 lakhs sum insured
5. Prepare for the next premium
Even if you choose not to increase the cover each year, do not assume the premium will be the same next year. Although IRDA has mandated that there would be no claim-based loading, the premium could increase due to other reasons – age of individuals, the risk profile of the entire group covered by the policy, decreasing profit margins o the insurer, and perhaps medical checkups, too (see below).
Plan for at least a 5% increase for the same cover. Start an online recurring deposit which matures 6-8weeks before the premium is due. If you are comfortable, you can choose liquid funds or even arbitrage funds or equity savings fundsEven if you wish to port your policy to another insurer, it would give you ample time.
Read more: How my health insurance costs have increased over the years. Much of this increase was due to an increase in cover. Once, United hiked premiums to cover their losses.
6. What about periodic health checkups?
Most health insurers agree to reimburse costs of periodic (every few years) health checkups. Via Health insurance or not, it is common sense to go for periodic health checkups. There is also a tax benefit (up to Rs. 5000 under 80D).
However, I am not sure it is a good idea to reimburse these costs from the health insurer. IRDA only said, “do not load premium based on claim history”. It did not say, ‘do not load, based on health checkup results.
By claiming a reimbursem*nt, you are updating the insurer about the present state of health when there is no obligation on your part to do so. I don’t think it is a wise idea. The insurer could use this data to refuse a higher cover in future.
So we recommend paying for a comprehensive master check-up once a year. Avoid using the health insurance policy for this.
7. Recognise that pre-existing clause applies all the time!
Typically insurers have a pre-existing disease clause for 2 -4 years. This applies at all times. Let me quote an example from a previous post:
My current SI is Rs. 5 Lakhs. When I was diagnosed withMyasthenia Gravis (the reason I needed the thymectomy), my cover was Rs. 4.5 Lakhs. This means that for the next two years (according to my policy) any hospitalization arising from Myasthenia will have a limit of Rs. 4.5 Lakhs and not Rs. 5 Lakhs. It is treated as a pre-existing disease and the rules that applied when the policy started also apply here!
Read more:Cashless Mediclaim – A First Person Narrative
8. Understand the implications of sub-limits
There is nothing wrong with buying a policy with room-rent sub-limits. The only precaution is to ensure that the room rent is always lower than that allowed by the sub-limit. This is because every kind of hospital fee (medicines, doctor fees etc.) is linked to the room rent. So if you choose a room rent higher than that allowed by your policy, you will only be reimbursed (or paid via cashless) a portion of the hospital bill.
Almost all private insurers offer policies without sub-limits. This is primarily because their market share and claim payment experience are considerably lower than the PSU insurers. So it must be viewed as an enticement to buy the policy. Features are subject to change at any time. The easier it is to buy health insurance, the more cautious you must be!
9. Prepare for shocks!
Take nothing for granted when it comes to health insurance policies. The premium can be hikedfor everybody(that is allowed) in case the company faces higher claims.
To circumvent the “no claim-based loading” rule of IRDA, the insurer may
- either refuse to increase the sum insured
- or permanently exclude health conditions that you claim for in future!
10. Do not assume portability is easy!
Just because a huge amount has hiked the premium, one cannot port a policy! Only applying for portability is a right. The other insurer need not accept your application! Here is what you need to know before porting your Health Insurance Portability.
Remember that the other insurer may hike the premium for you based on your application or after you port to increase the premium for all much higher than your older insurer! A case of from the frying pan to the fire!
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