What is cashless facility in Health Insurance? & Why it was Introduced ?

What is Cashless facility ?

Cashless facility in health insurance refers to a feature where the insured person can receive medical treatment at a network hospital without making any upfront payments or cash transactions. Instead, the insurance company settles the bills directly with the hospital.

To avail the cashless facility, the insured person needs to get admitted to a hospital that is a part of the insurer's network. The insured person has to provide their health insurance card or policy number to the hospital authorities, who will then verify the details with the insurance company. Once the verification is done, the insurer will directly settle the medical bills with the hospital, and the insured person does not have to worry about making any payments.

The cashless facility in health insurance provides a convenient way for the insured person to avail medical treatment without any financial burden. However, it is important to note that not all hospitals may be a part of the insurer's network, and in such cases, the insured person may have to make the payments upfront and later claim reimbursement from the insurer.

Why was Cashless facility Introduced?

Cashless facility in health insurance was introduced to make the process of availing medical treatment easier and more convenient for the insured person. Earlier, if an insured person had to undergo medical treatment, they would have to pay for the expenses upfront and later claim reimbursement from the insurer. This process could be time-consuming and financially burdensome, especially in cases of expensive medical treatments.

The cashless facility eliminates the need for the insured person to make any upfront payments, as the insurance company directly settles the bills with the hospital. This provides a hassle-free experience for the insured person and ensures that they receive the necessary medical treatment without any financial burden.

Moreover, the cashless facility also benefits hospitals as it ensures a steady flow of patients who have health insurance, thereby increasing their revenue. This encourages hospitals to join the network of hospitals associated with health insurance companies, ultimately benefitting the insured person.

Overall, the cashless facility in health insurance has made the process of availing medical treatment easier, more convenient, and less financially stressful for the insured person.