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19 Nov 2018

Important Health Insurance Terms & What They Mean: Part 3

The following are terminologies related to health insurance, which you are likely to come across when you file for a claim. Here is a glossary to help you understand what they mean:

  1. Claim: A claim is a payment request made by the network healthcare provider to the health insurance company for services it has rendered to the policyholder in case of a cashless claim. However, in case the policyholder has paid for the healthcare services he/she has received, then a claim will be for reimbursement and submitted to the health insurance company directly by the policyholder. To know more about the types of claims, click here.
  2. Case Management: Healthcare providers employ a team to handle the health insurance process. This team/health insurance desk coordinates with the policyholder prior to treatment, during treatment and post treatment to ensure that appropriate services are made available and also with the health insurance company for pre-authorisation, claim submissions, etc.
  3. Date of Service: The date(s) of service refer to the date on which the policyholder availed the healthcare services for which the claim has been made.
  4. Submission Date: Submission date refers to the actual date on which the claim was submitted to the insurance company.
  5. Principal Diagnosis: The principal diagnosis refers to the main reason why the policyholder visited the healthcare provider in the first place and the diagnosis that lead to the treatment (for which a claim has been made).
  6. Evidence of Insurability: Before treatment (during the pre-authorisation stage) or later, the health insurance company or the healthcare provider might require documentation from the policyholder as proof of his/her eligibility for the insurance.
  7. Supplemental Reports: Supplemental reports refer to additional information/proof requested by the health insurance company from the healthcare provider to explain why a certain treatment was provided to the policyholder.
  8. Adjudication: Adjudication is an administrative process followed by the insurance company to check the details of the claim received and to verify its authenticity and need. The insurance company also determines, through this process, whether the requested claim amount is to be fully paid, partially paid or rejected.
  9. Anomalous Elements: During the adjudication process, the insurance company may find anomalies within bills for diagnosis tests, procedures, medicines or actual prescribed diagnosis/treatment path for the patient. This will affect the outcome of the claim.
  10. Claim Status: Claim Status refers to the status of the claim at any given point in the process – paid, not paid, in-progress or waiting for action, etc.
  11. Withhold: This refers to the amount withheld by the insurance company, in comparison to the amount requested in the claim.
  12. Denied Claim: For some reason or the other, after the adjudication process, an insurance company may decide to reject the claim. This is known as  denied claim.
  13. Explanation of Benefits (EOB): The health insurance company is mandatorily expected to send an EOB, a written statement explaining the reasons for the amount paid for the claim, which treatments were paid for, why certain payments were not paid as requested or why a claim was denied.
  14. Appeal: If a claim has been rejected by an insurance company, the patient or healthcare provider may make a request, or appeal, that they review or change their claim decision.
  15. Organisational Determination: A health insurance company, upon receiving an appeal from the healthcare provider or policyholder, reviews the claim once again. The decision then made is known as the organisational determination.

For more insurance-related terminologies and their descriptions, read Part 1 and Part 2 of the same article.

12 Nov 2018

Important Health Insurance Terms & What They Mean: Part 2

Your health insurance policy comes with a heap of jargon that needs to be fully understood, for your own benefit. Here is a glossary of 15 terms that can help you when going through your policy document.

  1. Inpatient Care: Inpatient care refers to treatment received by the policyholder at a healthcare facility for more than 24 hours/with an overnight stay.
  2. Outpatient Care: Outpatient care refers to healthcare treatment that does not require an overnight hospital stay or a hospital admission. It is important to note that some insurance plans do not cover outpatient treatment costs.
  3. Ancillary Services: These include services provided by the healthcare facility other than the treatment. Biometric tests, physical therapy, and physician consultations are some such services. Policies have certain limits on the kind of refunds offered towards ancillary services.
  4. Applied to Deductible (ATD): The amount paid by the policyholder for healthcare services to the hospital/healthcare provider and goes towards the payment of the annual deductible.
  5. Capitation: Capitation is a fixed payment that a patient makes to a health insurance company or healthcare provider if they have availed various healthcare services to recoup costs incurred.
  6. Pre-authorisation: Certain health insurance policies require that their policyholders avail their permission prior to planned hospitalisations. Coverage may be denied if a policyholder has not received authorisation.
  7. Pre-Certification: A process similar to preauthorization whereby patients must check with insurance companies to see if a desired healthcare treatment or service is deemed medically necessary (and thus covered) by the company.
  8. Pre-existing Condition (PEC): A pre-existing condition refers to a medical condition that the policyholder had and was aware of before taking up the policy. In the case of treatments for such conditions, the insurance company may levy a waiting period before coverage. A PEC may also make an individual ineligible for certain types of policies as well.
  9. Waiting Period: The waiting period is a fixed period of time a policyholder might have to wait before availing certain benefits from the policy. come in effect.
  10. Self-Pay: When a policyholder goes for treatment to a healthcare provider not within the network of the insurance company, then they will be expected to pay from their own pocket or self-pay. They can then apply for a reimbursement from the insurance company.
  11. Cumulative Bonus: If a policyholder does not make any claims during a year, the sum insured for the same policyholder will be increased by a certain small percentage during the next year, without an increase in the monthly premiums paid.
  12. Supplemental Insurance: A supplemental insurance is a secondary insurance policy that can help cover for deductibles and copays incurred by the policyholder from the first/primary health insurance policy.
  13. Non-Covered Charge (NC): Before you sign up for an insurance policy or file for a claim, you need to know that there are certain treatments and health services that will not be covered by your policy. These are known as non-covered charges. A cosmetic surgery is an example of an NC.
  14. Usual Customary and Reasonable (UCR): For each type of treatment, there is a UCR or a stipulated amount determined by the insurance company. If the healthcare provider charges more than the UCR for a certain treatment, the policyholder will be expected to pay the difference.
  15. Patient Responsibility: Payments for anything beyond the Usual Customary and Reasonable (UCR) or Non-Covered Charge (NC) and will not be covered by the insurance company inevitably becomes the patient’s responsibility. This could also refer to the policyholder’s share in a  co-pay or co-insurance policy.

For more terms related to health insurance, read Important Health Insurance Terms & What They Mean: Part 1.

05 Nov 2018

Important Health Insurance Terms & What They Mean: Part I

Before you sign the papers on a health insurance policy document, it is extremely important to read through all of the terms and conditions to understand the scope of services that you you will be covered under, in case of a medical need. While doing so, you are likely to find a number of terminologies related to health insurance that you may be unfamiliar with.

Here is a handy list of 15 such important terms and their meaning to help you in the process:

  1. Premium: This is the sum of money the insured/policyholder has to pay on a monthly (sometimes quarterly) basis to an insurance company. Once you sign the policy documents and provide your bank information, this sum may be arranged to be auto-deducted from your account.
  2. Allowed Amount: The allowed amount is the maximum sum of money that an insurance company offers to cover a specific healthcare service or procedure. If the treatment cost exceeds this amount, the policyholder will have to pay the balance amount on their own. This is different from the total sum insured, which is the overall amount an insurance company will spend for a single policy.
  3. Term Date: The insurance policy you are signing up for is a contract for a limited period – typically a year. The term date refers to the last date of this contract. Beyond the term date, you will no longer be eligible for the insurance cover.
  4. Healthcare Provider: These are the entities that offer healthcare services to patients, including hospitals, physicians, and private clinics, hospices, nursing homes, and other healthcare facilities.
  5. Network Providers: Healthcare providerS that have entered into a contract of partnership with the insurance company to provide cashless benefits to insured/policyholders. IThe list of network providers/hospitals is usually provided along with your policy document.
  6. Out-of-Network: Out-of-network refers to healthcare providers that are not part of an insurance company’s list of network. Cashless claims cannot be made by policyholders if they visit an out-of-network hospital. Instead, they will have to pay from their pockets and later submit a claim for reimbursement.
  7. Indemnity: An indemnity is a type of health insurance plan where a person is eligible to receive care with any healthcare provider in exchange for higher deductibles and co-pays. It is also referred to as a fee-for-service insurance.
  8. Managed Care Plan: A managed care plan is a type of health insurance that will only cover treatments made through network providers and will not offer any cover (including reimbursement) for treatment through out-of-network providers.
  9. Deductible: A deductible is the amount a policyholder must pay towards his/her healthcare treatment before an insurance company begins to cover the costs as part of the policy. Deductibles range in price according to terms set in a person’s health plan.
  10. Co-Insurance: In certain policies, the policyholder is expected to pay a certain percentage of the treatment cost while the insurance company pays the remaining. This is known as co-insurance.
  11. Co-Pay: A co-pay is the amount that must be paid to a healthcare provider by the policyholder before they receive any treatment or services. Co-pays are applicable only in certain insurance policies.
  12. Maximum Out of Pocket: The amount amount a patient is required to pay whether in terms of deductibles, co-pays or co-insurance.
  13. Guarantor: The party paying for an insurance plan who is not the patient. Parents, for example, would be the guarantors for their children’s health insurance.
  14. Third Party Administrator (TPA): A TPA is a third-party organisation, hired by the insurance company to act as the intermediary between the policyholder, the healthcare provider and the insurance company.
  15. Subscriber: If your insurance is part of a group policy (such as one that an employer takes on behalf of employees), then each individual who is covered under the policy is a subscriber.
30 Oct 2018

All You Need to Know About Deductibles in Health Insurance

You have opted for a health insurance policy, you are paying your monthly premiums, but when you have a need for treatment, your health insurance expects you to pay a part of the total cost. Don’t be caught unawares, there is something you need to know about deductibles in health insurance.

A deductible is the amount up to which the policyholder is expected to pay for availing healthcare services before the insurance company steps in and begins to pay/cover. Only once the deductible is met does the insurance company pay for the policyholder’s treatment or care. In other words, this is similar to self-insuring yourself before you start to claim from your insurance company. Usually, policies with lower premiums will have higher deductibles and vice versa.

The following are the different types of deductibles:

Comprehensive Deductible

The comprehensive deductible is the deductible that is applied across all types of treatment costs and other healthcare-related expenses that will be covered under the policy. It adds up until you have met the maximum deductible for the given period.

Non-Comprehensive Deductible

The non-comprehensive deductible is a deductible that only applies to specific costs towards certain medical treatments in a health insurance policy. This means that, for some treatments, there will be no deductible and for some others, the deductible will apply.

Cumulative Deductible

If members of a family are covered under a single family health insurance policy, then a cumulative deductible or a family deductible may apply. This means that a single deductible applies for all members of the family cumulatively. However, it is important to note that some family insurances may have individual deductibles as well.

Once you have met your deductibles, you think you need to make no more additional payments to the health insurance company? Well, that is where you would be wrong.

Typically, there are three types of “out-of-pocket expenses” a policyholder will incur in addition to the monthly premiums paid towards a health insurance. These are what limit the liability of the insurance company to a certain extent. The maximum amount paid cumulatively through all the three make up the “out-of-pocket maximum”. Different health insurance policies have different amounts predefined as the “out-of-pocket maximum”.

23 Oct 2018

5 Factors to Consider When Choosing a Health Insurance Company

Choosing a health insurance policy suited to your specific needs, with a premium affordable by you is important. Equally important, however, is opting for the right health insurance company from which to invest in a health insurance policy.

Here are some of the most important factors to keep in mind when choosing your health insurance company.

1 Claim Settlement Ratio

Claim Settlement Ratio (CSR) is a percentage that reflects the total number of claims settled with respect to the total number of claims received by the insurance company. In other words, the CSR gives you an idea of the possibility for the insurance company to settle a claim that you are likely to make. While it is justified for insurance companies to reject duplicate or fake insurance claims, it is peculiar if an insurance company rejects most of the claims it receives. Therefore, insurance companies that have a low claim settlement ratio are likely to reject most claim requests received by them – which puts you in a vulnerable position at the time of an emergency need.

CSR = Number of claims settled / total number of claims received

2 Incurred Claim Ratio

Incurred Claim Ratio (ICR) refers to the total amount paid by the insurance company to settle insurance claims in a year with respect to the total amount collected by the company as premiums from all its insured. If the amount paid by the company is more than the premium it receives, this means that the company is running on a loss and may not be able to pay for claim requests in the future. However, if the ICR is too low (less than 50%), then it means that the company is not paying enough in terms of settlements. Therefore, a balanced ICR (between 75% – 90%) is what establishes an insurance company’s ability to pay and its reliability.

ICR = Net Claims Incurred / Net Earned Premium

3 Solvency Ratio

Solvency Ratio (SR) is used to measure a company’s ability to meet its debt and other obligations by determining if its incoming cash flow is sufficient to meet liabilities. It is preferred to opt for an insurance company with a higher solvency ratio as this means that it has a higher proportion of asset holdings. is preferred while a low solvency ratio indicates that the company may not be able to pay for claims.

SR = Net Income / Total Liabilities

4 Network Hospitals

Most insurance companies today come with a list of network hospitals they are affiliated with. At these hospitals, the insured are allowed to opt for cashless treatment. Cashless treatment means that the insured patient need not pay for the treatment they are availing (other than co-pay/co-insurance amounts). The hospital will directly deal with the insurance company or its TPAs and arrange to get paid for the services it has offered free of cost to the insured patient.

On the other hand, if the insured patient avails treatment in a non-network hospital, he/she will first have to pay for the treatment and then apply for a reimbursement from the insurance company. A good health insurance company will have a long list of network hospitals – with plenty of options for the insured to choose from, preferably within their own locality.

5 Business Volume

Business volume refers to the total number of active customers, who are paying monthly or quarterly premiums to the insurance company. This can also be determined by the number of policies sold by the insurance company in any given year.

Naturally, the company with with a large business volume is considered to be more trustworthy, simply because it is likely to have the resources required to pay for claims.

The importance of making an informed choice when investing your money cannot be emphasised enough. We hope that this list will enable you to choose wisely.

You may also refer our blog on Top 10 Insurance Companies in India to guide you in the quest for the right insurance company.


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