Sign In

What would a Health Insurance policy normally cover?

​​The term ‘Health Insurance’ relates to a type of insurance that essentially covers your medical expenses. A health insurance​ policy, like other policies, is a contract between an insurance provider and an individual / group in which the insurance provider agrees to offer specified health insurance cover at a particular “premium” subject to terms and conditions specified in the policy.

What a Health Insurance policy would normally cover?
A Health Insurance Policy would normally cover expenses reasonably and necessarily incurred under the following heads in respect of each insured person subject to overall ceiling of sum insured (for all claims during one policy period).
a) Room, Boarding expenses
b) Nursing expenses
c) Fees of surgeon, anesthetist, physician, consultants, specialists
d) Anesthesia, blood, oxygen, operation theatre charges, surgical appliances, medicines, drugs, diagnostic materials, X-ray, Dialysis ,chemotherapy, Radio therapy, cost of pacemaker, Artificial limbs, cost or organs and similar expenses.

• Sum Insured: The Sum Insured offered may be on an individual basis or on floater basis for the family as a whole.

• Cumulative Bonus (CB): Health Insurance policies may offer Cumulative Bonus wherein for every claim free year; the Sum Insured is increased by a certain percentage at the time of renewal subject to a maximum percentage (generally 50%). In case of a claim, CB will be reduced by 10% at the next renewal.

• Cost of Health Check-up: Health policies may also contain a provision for reimbursement of cost of health check up. Read your policy carefully to understand what is allowed.

• Minimum period of stay in Hospital: In order to become eligible to make a claim under the policy, minimum stay in the Hospital is necessary for a certain number of hours. Usually this is 24hours. This time limit may not apply for treatment of accidental injuries and for certain specified treatments. Read the policy provision to understand the details.
• Pre and post hospitalization expense: Expenses incurred during a certain number of days prior to hospitalization and post hospitalization expenses for a specified period from the date of discharge may be considered as part of the claim provided the expenses relate to the disease /sickness. Go through the specific provision in this regard.

• Cashless Facility: Insurance companies have tie-up arrangements with a network of hospitals in the country. If policyholder takes treatment in any of the network hospitals, there is no need for the insured person to pay hospital bills. The Insurance Company, through its Third Party Administrator (TPA) will arrange direct payment to the Hospital. Expenses beyond sub limits prescribed by the policy or items not covered under the policy have to be settled by the insured direct to the Hospital. The insured can take treatment in a non-listed hospital in which case he has to pay the bills first and then seek reimbursement from Insurance Company. There will be no cashless facility applicable here. The Consumer Affairs Department of the Insurance Regulatory and Development Authority (IRDA) has introduced the Integrated Grievance Management System (IGMS) which is an online system for registration and tracking of grievances.

Types of health insurance or health coverage
Broadly speaking there are two types of health insurance:

Private health insurance - The CDC (Centers for Disease Control and Prevention) says that the US health care system is heavily reliant on private health insurance. 58% of Americans have some kind of private health insurance coverage.

Public (government) health insurance - For this type of insurance; premiums need to be collected even though the coverage is provided by the state. Therefore, the National Health Service (NHS) in the United Kingdom is not a type of health insurance - even though it provides free medical services for its citizens, it does not collect premiums - it is a type of universal health coverage.

With health care, there is already massive government intervention. The most obvious example is the double debut of Medicare and Medicaid in the 1960s. In addition, there is a wide array of relatively minor but still significant issues: various labor market restrictions (e.g., you and I are not allowed to receive medical services from professionals who provide the same services to our armed forces), mandated insurance benefits (for everything from in-vitro fertilization to hair transplants), the explosion of medical malpractice awards (and thus, malpractice insurance rates) and so on.

Article by Prasanna Kumari