Do you have the money to settle your hospital bills till the insurance company reimburses? Here's how to plan for this

A recent survey claimed that health insurers take anywhere between 20-46 days to settle your hospital bill claims. This means while you may your hefty hospital bills reimbursed, you may have to fund it from your own pocket till that time. health insurance claim. 

Flip-side of health insurance

The research conducted by insurance technology platform SecureNow said investing in a health insurance policy alone may not be of the desired help as many health insurers take around 20-46 days to settle patients’ claims.

The insurtech platform revealed how health insurance companies took time ranging between a month and two months despite patients being quite prompt in informing the insurance companies about their treatment and claims within a week of being hospitalized. Irrespective of the kind and duration of treatment, health insurers take time to settle the claims.

The data underscores how it does not really matter if the insured files the claims quickly to seek reimbursement. The insurers pay at their ease Also, many of the insured customers complain how the waiting period between intimation and settlement is the most in any typical claim processing timeline.

Regarding the delay, Suresh Sadagopan, founder of Ladder7 Financial Advisories, says, “This is a difficult question to answer and would be due to the specifics of the case. Many times, clients do not send all the required information/documents needed for claims to be processed. Hence, this keeps going back and forth with the ensuing delays. Also, if the rate charged seems higher than normal, the insurance company may do their fact-finding which can again cause delays.”

The information regarding such a delay comes in the light of data that highlight nearly 10 million health insurance claims every year. Apart from the delay, most insurance companies refrain from paying the entire amount as they tend to deduct 13-26 per cent of the total claim amount citing deductions made on grounds of uncovered consumables and administrative expenses.

Set aside an emergency fund

All these impediments mean that having a health insurance policy alone does not suffice. One must have an emergency fund in place to pay for sudden and unforeseen expenses related to hospitalization and subsequent treatment. This also gives way to another important question regarding the size of the emergency fund. How much should the corpus size be? How much would be enough so that we can pay our clients without having to break into savings? The questions are long and numerous, though there is no definite answer to put all queries to rest.

Raj Khosla, founder and managing director, MyMoneyMantra, says, “Emergency fund should be as per emergency cashflow requirements and cannot be for specific requirement based like medical or unforeseen events. This fund provides minimum return and offers high liquidity with low exit costs. In general, emergency funds should be in the range of six to nine months of your monthly expenses, depending on your overall financial planning and the availability of funds from such medium to long-term investments.”