Health insurance

5 surprising things that turn your cashless health insurance into a nightmare

But choosing cashless health insurance is easier said than done.

By Mathilde Giglio

During FY21, health insurance grew by 13.3% in gross direct premiums (GDP). And the online individual insurance market opportunity is expected to reach $ 1.25 billion by fiscal year 25

Even people who were suspicious of insurance companies and depended on their personal savings to pay for medical expenses before the pandemic have learned that their personal savings are woefully insufficient for medical emergencies.

As such, there is an increased demand for cashless insurance that can provide sufficient protection against unforeseen medical bills. But choosing cashless health insurance is easier said than done. Besides the usual suspects like copayments, deductibles, sub-limits, and room rent caps, there are curve balls that can expose your bank balance to dip in the red.


Over 60% of your health care expenses are attributed to outpatient service (OPD) expenses such as doctor visits, payment for prescriptions and diagnostic tests. According to reports, Indians see a doctor an average of three times a year and a diagnostic test is prescribed every 3.5 visits.

According to the 75th ONS Health Survey, 122 times more people do not need hospitalization than those in urban areas of India.

Yet most insurance plans are still underwritten to cover hospital costs, which means you are paying premiums while spending a large chunk of your savings on health care costs.

Insurance companies now offer health coverage with OPD. But there are either ceilings on annual expenditure or an introduction of the quota. All this with an increase in your premium over the premium paid only for the IPD. So choose a plan that gives you sufficient OPD coverage.

No to pay

IRDAI generally has a list of up to 200 non-payable or non-medical expense items that it exempts from paying insurance companies. For example, an arm sling, mask, urine bags, clean sheets, visitor pass, medical records, etc. All this must be taken care of by the patient or his family during the hospitalization. On average, these expenses represent 10% of your hospital bill. But we have seen them climb up to 50% during the pandemic.

Insurance companies are working to reduce the list of non-payable to attract consumers and reduce the percentage of expenses borne by the patient.

Ambulance costs

Ambulance costs are the responsibility of the insurance company, but even the best insurance plans only cover ambulance costs up to Rs 10,000. Calling an ambulance in a city like Bangalore costs around Rs. 2000 for the first 10 kilometers and Rs 120 per additional kilometer with a waiting charge of Rs 250 per hour.

Uncontrolled hospital environment

No one can accurately predict what you will end up spending after entering the hospital. A regular medical visit can follow a series of unexpected tests, surgery with a standard treatment line can lead to complications driving up the final cost.

An uncalculated decision in the choice of the sum insured may lead you to pay surprise costs to the hospital for which your insurance company cannot be held responsible.

You buy worst-case health insurance, so if you can afford a higher premium, you should go for a high sum insured. Most personal finance experts recommend a minimum health coverage of Rs 5 lakh or at least 50% of your annual income.

Your active lifestyle

It’s ironic that an active lifestyle can negatively impact your hospital experience. But here’s why it could happen. All health insurance plans have permanent exclusions for injuries resulting from athletic or adventurous activities. So if you are active and like to take risks, you may want to keep some extra change in your pocket.

The devil is in the details when choosing health coverage for you and your family. Investing in coverage that can protect your finances against medical inflation is more important than ever.

(The author is the COO and co-founder of Even. Opinions are personal and not necessarily those of Financial Express Online.)

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