Wading through the dense jargon of health insurance

Have you ever tried to decipher an insurance policy? The words in the policy document might put you in a plight similar to that of Eeshan Awasthi, the little boy in Taare Zameen Par — where the teacher in the classroom is desperately trying to impart her ‘knowledge’ and the little boy is off in another world of his own!
Similarly, an insurance policy goes on and on, with most of the text going above the head of the policy holder. There’s a dazzling assortment of the preamble, clauses, sub-limits, coinsurance, definitions, notifications, fees, penalties, exclusions and warranties, to be read, re-read and understood. Despite this, one may not fully understand the document.Jargon! How we love it!
The insurance industry has its share of dense jargon that causes ambiguity and results in innumerable disputes. In this article, we try to simplify a few terms used in the health insurance policies, so that it will be easier for the reader to wade through it, the next time he reads.
Floater Policy: In a floater policy, there will be a single limit for the entire family. Any member of your family or all put together can claim up to this limit for which the policy has been taken. For example: Let us assume that you have a mediclaim floater policy for Rs 2 lakh for your entire family consisting of self, spouse and 2 children. The benefit of a floater policy is that if any member of your family gets hospitalised, he/she can claim up to Rs 2 lakh. The only condition being that the total amount which can be claimed during the year by the entire family irrespective of who claims it stands capped at Rs 2 lakh.
The floater policy is generally not given to individuals but is taken by corporates for their employees and their families.
Non floater policy or the standard policy: In case of a non floater policy, or a standard policy, there is a cap on the individual limit for each member of the family. Say self and spouse have a limit of Rs 75,000 each and 2 children for Rs 25,000 each. In this case, in case of hospitalisation of one of the children, for a bill amounting to Rs 40,000, the maximum reimbursement that can be made is Rs 25,000 only. Whereas had it been a floater policy, the full claim of Rs 40,000 can be made, subject to availability of this limit by not having claimed over Rs 1.60 lakh earlier during the year.
Waiting period
It’s the period of time specified in a health insurance policy, which must pass before your health insurance coverage pertaining to certain ailments can begin. For example: If one has a waiting period of one year for covering cataract, and one has been operated for cataract around 9 months after the policy commenced, the claim will not be payable.
Pre-existing diseases: A pre-existing medical condition is one wherein the ailment has been diagnosed (or medically treated by a doctor) before the policy commencement date.
Suppose a person had an angioplasty done before the date of the policy, then his cardiac condition would be considered a ‘pre-existing condition’. If he subsequently suffers a heart attack, the insurer would be entitled to refuse payment.
The claim is repudiated when the prior existing medical condition has a direct bearing upon the ailment for which the hospitalisation has now taken place.
This exclusion applies normally to all individual policies, whereas groups can negotiate for waiver.
TPA (Third Party Administrator): A TPA is an authorised agency, appointed by the insurance company, to take care of claim settlements in health insurance.
The claim settling function is outsourced by the insurer, in order to improve the efficiency of claim settlement.
Cashless Claim Settlement: When you opt for a cashless facility, you can avail medical treatment as an inpatient (only at an empanelled hospital — known as ‘network’) without paying the treatment costs upfront to the hospital. The insurer / TPA will directly settle the bill with the hospital. When you avail cashless facility, personal expenses like telephone charges, toiletries, health drinks etc will have to be borne by you.
Reimbursement Claim Settlement: When you opt for a reimbursement facility, all the bills related to the hospitalisation will have to be paid by you directly to the hospital.
After discharge, all the reports, bills and receipts must be submitted by you, along with the claim form to the insurer or TPA. After scrutiny of the same, the insurer/TPA will settle the claim and reimburse you the claimed amount.
Network hospital (empanelled): A hospital which has entered into an agreement with an insurer or a TPA to extend cashless facility.
Non-network hospitals: Those hospitals which do not have a tie-up with your insurer / TPA are called non-network hospitals and you cannot avail cashless facility at these hospitals. You have to pay first and claim later.
One of the most important things you can do as a policy-holder to avoid hassles during a claim is to review and understand the terms and conditions of the insurance policy.
If you have any questions, contact your agent/ broker/ insurer for an explanation. This helps you to avoid any misunderstanding.

Source: The Hindu