How to Claim for Health Insurance from Multiple Insurers

Last Updated: Jan 05, 2022 | 3,426 Views
Healthcare costs were significantly lower a decade ago. A health policy of Rs. 2 lakh back then could provide adequate coverage for a small family; today, the same policy will not go far.

Galloping inflation in healthcare has ensured that a single health plan is no longer enough. Many are now buying multiple policies in order to increase their health coverage. However, multiple policies give rise to multiple queries regarding the claims process:
  • Should I claim with one company?
  • Should I split the claim amount among multiple companies?
  • On which policy should I claim first?
  • Which bills would individual insurers require?
  • Do the insurers need to know about additional covers?
  • The above is by no means a comprehensive list of the questions that emerge, but they are all pertinent questions that come into play during claim season. So what should you do when the time comes to file claims?

Group Health Plans V/S Individual Health Plans
It is very important for each and every person to purchase an Individual Health Plan over and above the Company Provided Group Plan for the simple reasons like:
  • Who provides for your Health Care Benefits post retirement?
  • What happens to your plan if you quit you your Present Organization and move to an Organization without a Health Coverage?
  • Who will provide you with a High Cover Health Plan after you have conceived illnesses like Diabetes, Heart Ailment, etc.?
  • With Medical Inflation beating regular Inflation by over 5%, how can one suffice for the Medical Expenses without a Health Plan?
The debate can be unending but the most sensible thing to do is to opt for an Individual Health Plan before conceiving any ailment and not claiming for the first 3 policy years, so that all exclusions and waiting periods are covered and the no claim bonus also accrues substantially.

Now, once you have an Individual Health Plan over and above the Group Plan, the classic question that arises is: Which one to claim from and when?
  • Exhaust the claim limit on your group insurance plan first, if you have one at your workplace. A Group Policy Claim is settled much smoothly than an Individual Claim.
  • A claim on your Individual Policy may lead to a loading charge on your renewable premium and you would not be eligible for the No Claim Bonus
  • Moreover, if your Individual Health Plan is a relatively new one—i.e. within a couple of years —it may not cover pre-existing conditions and have a waiting period for a few standard hospitalizations.
But make sure to inform all your insurers and third party administrators (TPAs) about your hospitalization. In case the group policy does not cover the entire costs of hospitalization, being upfront with your other insurers will facilitate the claims process.

When You Have Multiple Personal Policies
In the case of two or more similar policies, the contribution clause comes into play. Under this clause, your multiple policies will contribute towards claims proportionate to their respective coverage levels. For example, if one policy offers Rs. 5 lakh coverage and the other offers Rs. 3 lakh coverage, them the first policy will pay 5/8th of the claim amount and the second will pay 3/8th of the claim amount.

On the other hand, you could buy multiple policies to distribute the risk. For instance, your base policy could be a regular health insurance plan while your second policy could cover a specific pre-existing disease that is excluded by the first plan. In this case, costs are distributed depending on the type of ailment.

In case of different plans from the same insurer, work on retaining the same TPA. This will smooth out the claims process.

Things to Do When Filing Multiple Claims
As mentioned above, you need to keep all your insurers and TPAs in the loop during hospitalization and inform them that you have more than one health plan. In fact, claim forms require the insured to furnish details about other policies. This is so that even if the insured claims from a single insurer, that insurer will follow-up with the other insurer/s for their contributions towards the claim.

Note that if one of your policies is brand new and still within the waiting period, claims will be processed by your earlier policies. New policies have a Waiting Period for certain illness for a period of 2 to 4 years for illnesses like cataract, piles, etc. and also sometimes for Maternity and Pre Existing Illnesses. Hence older plans come much handy to cover the same.

Remember that all your multiple insurers will require the original bills and documents. In case the hospital is unwilling to provide you with duplicates, attested copies of the documents will suffice.

Things to keep in Mind for Health Insurance Claim from Multiple Insurers:
  • Irrespective of whether you have a Group Health Plan or not, an Individual Health Plan is a MUST…. and much before you contract any serious illness so that the same is not excluded
  • If you have a Group Insurance Coverage, it makes most sense to claim from the group plan first because the claim settlement is much smoother and easier under a group health plan
  • Contribution Clause comes into action as soon as Multiple Health Plans come into action and the claim is settled as per the percentile of coverage
  • Older Policies should be used for claims before the newer ones so that the Waiting Periods for Pre-existing illnesses, 2 year exclusion illnesses, maternity, etc. are over before the same is claimed from the newer plans as well.

Points to Ponder:
Thus, if you feel, I am asking you not to opt for Individual Plans, you are mistaken. In fact I would advise each and every bread earner of the family to:
  • Think of their family’s medical expenses in tune to the ever-rising medical inflation which has been inflated further due to the new industry of medical tourism
  • Think of a Critical Illness Plan over and above a Reimbursement Health Plan such that a lumpsum money would be payable to the family on diagnosis of any of the specified Critical Illnesses
  • Consider a Top Up Health Plan or a Super Top Up Health Plan in case you wish to enhance the medical coverage of your family

Manoj Aswani
Manoj is the co-founder and COO of MyInsuranceClub. He has experience in Financial Services, Internet, Insurance and Outsourcing business. He has done his Post Graduation from XLRI, Jamshedpur.