A health insurance policy is a contract between an insurer and the policyholder. It is a means of financial protection against medical expenses during hospitalisation. The policy pays for the medical expenses incurred by the policyholder up to the sum assured. Health insurance plans are of different types and offer different features. Some plans might cover pre and post-hospitalisation expenses, while some might not. It is important to choose a health insurance plan that best suits your needs. In this article, we will discuss the role of the claim settlement ratio in choosing a health insurance plan.
What is the Claim Settlement Ratio?
The claim settlement ratio is the percentage of total claims an insurer settles during a financial year. It is the ratio of the total number of claims settled to the number of claims made. It is a good indicator of the insurer’s ability to settle claims. A high claim settlement ratio indicates that the insurer settles a high percentage of claims. This is a good sign for the policyholder as it indicates that the insurer is financially stable and capable of meeting its financial obligations.
Why is the Claim Settlement Ratio Important?
The claim settlement ratio is a crucial factor to consider while choosing a health insurance plan. This is because it gives you an idea of how likely your claim is to be settled by the insurer. A high claim settlement ratio indicates that the insurance company has a high record of settling claims.
When you are looking for a health insurance plan, it is important to consider the claim settlement ratio (CSR) of the insurer. The CSR is the percentage of claims an insurer settles against the total number of claims received in a financial year.
A high CSR indicates that the insurer is settling more claims and is, therefore, more reliable. However, you must also check the fine print of the policy before buying it to ensure that there are no such clauses that may result in your claim being rejected.
To conclude, CSR is an important factor to consider while choosing a health insurance plan, but you must also be aware of the terms and conditions of the policy before buying it.
How is the Claim Settlement Ratio Calculated?
The claim settlement ratio is calculated by dividing the number of claims settled by the insurer during a financial year by the total number of claims received during the same period.
For example, if an insurer receives 100 claims in a year and settles 80 of them, then the claim settlement ratio would be 80%.
There is no set number for a good claim settlement ratio. However, a claim settlement ratio of 80% and above is considered good.
Types of Health Insurance Claim
Let us discuss the various methods using which one can file and settle their health insurance claims.
Cashless Claim Settlement Method
In a nutshell, cashless claim settlement is a method of health insurance claim whereby the policyholder does not have to pay anything out-of-pocket. The entire process is handled by the health insurance company and the network hospitals associated with them. In order to avail of this benefit, you will first have to find out if your health insurance policy and chosen hospital are a part of the same network.
Once you have been admitted to a network hospital, you will not have to pay anything for your treatment. The hospital will send the bill directly to your health insurance company, and they will settle it on your behalf. In case of any pre-existing illnesses, you might have to undergo a waiting period before availing of this benefit.
This is how the cashless claim settlement process works:
- Intimation to the insurance company: As soon as you are admitted to the hospital, you will have to inform your health insurance company about it. You can do this by calling customer care or sending them an email.
- Admission formalities: Once you have intimated the insurance company, the hospital will take over and complete all the admission formalities. This includes getting all the necessary tests done and putting you under observation.
- Bill submission and approval: After you have been discharged, the hospital will submit the bill to your health insurance company. The insurance company will then go through the bill and see if it is eligible for cashless claim settlement. If it is, they will approve the claim and settle the bill directly with the hospital.
Reimbursement Claim Settlement Method
In case your health insurance policy does not cover cashless claim settlement or if you have been treated in a non-network hospital, you will have to pay for your treatment yourself. After you have been discharged, you will have to submit all the relevant bills and documents to your health insurance company. They will then reimburse you as per the terms and conditions of your policy.
Pre-authorisation Claim Settlement
If you have been hospitalised, your treating doctor will have to obtain prior approval or pre-authorisation from your best health insurance company. Once the insurance company approves your treatment, they will make arrangements for cashless settlement of your claim. If you have not obtained prior approval and have been treated in a non-network hospital, you will have to settle the claim yourself and then apply for reimbursement.
Direct Claim Settlement
In this case, the insurance company settles the claim directly with the hospital. The treatment costs are covered as per the terms of your policy, and you do not have to pay anything out of your pocket. This is generally the case with network hospitals.
Indemnity Claim Settlement
In an indemnity health insurance policy, the insurer reimburses you for the medical expenses that you have incurred. It does not make any payments directly to the hospital. The reimbursement is based on the sum assured under your policy and the actual medical expenses incurred, whichever is lower.
What are the Factors that Affect the Claim Settlement Ratio?
Several factors can affect the claim settlement ratio.
1. The type of health insurance plan
2. The age of the policyholder
3. The sum assured
4. The network of hospitals
5. The claim history of the policyholder
6. The pre-existing medical conditions of the policyholder
7. The waiting period
8. The claim settlement procedure
It is recommended that before you buy your health insurance, check the insurer’s claim settlement ratio. The higher the ratio, the higher the chances of your claim getting settled. Also, take note of the factors that affect the claim settlement so as to ensure smooth claim processing.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.