What’s Your Fallback: When Your Health Insurance Provider Refuses To Pay Cashless

by Vinaya HS on September 21, 2010

in Finance

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When I first asked “What’s Your Fallback?”, it was meant to be a one-off topic. But the more I think about this question, the more questions it leads to about one’s personal finances: How would you deal with the financial setbacks that happen in your day to day life?

A case in point:

Health Insurance [in most cases] is supposed to be a cashless facility. But looking at recent events, there’s really no guarantee and you might have to pay the bills upfront. So, what financial fallback mechanisms should one have in place to deal with such an event?

A couple of options that I could think of:

  • A separate emergency fund meant solely for such major emergencies. This would be on top of your regular emergency fund and can be replenished once the claims are settled. I’m not sure if this is a good idea.
  • Credit Cards. Would push you into temporary debt but can be paid off once the claims are settled.

What would you suggest?




Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 6 comments… read them below or add one }

Shilpa September 21, 2010 at 9:03 AM

Right.
But unlike regular emergencies, any much you save for a medical emergency is too little.
We are talking about a few lakhs here and we don’t want the money to sit idle, right?
So, your next post would be, how do you structure your emergency fund?

pattu September 21, 2010 at 9:07 AM

Having seen the misuse of cahsless by hospitals several times, If I had a separate emergency fund equal to my mediclaim sum assured I would choose to reimburse every time. This way the hospital will not write extra tests etc. Of course this is difficult to manage. One should also know when to intimate te TPA about hospitalization etc.

In fact once could even use ones primary emergency fund for this. Since claims if clean come through in a couple of months.

Vinaya HS September 21, 2010 at 9:10 AM

@Shilpa:

Yeah. You can never predict how much you would need in a medical emergency. But you do need to have something stashed away somewhere right? From my experience, hospitals ask you to deposit amounts as and when your bill keeps increasing. You’d need to have something at least for the initial few days until the issues with the health insurance provider are sorted out.

And since when did you start predicting my posts? :-)

Vinaya HS September 21, 2010 at 9:15 AM

@pattu:

I like your point of having a separate emergency fund equal in value to your health coverage and opting to reimburse.

Shilpa September 21, 2010 at 10:53 AM

@V:
Since the time I started giving you ideas for the posts :P

Vinaya HS September 21, 2010 at 10:59 AM

@Shilpa:

Lest you forget, your guest post is due next week. Ref: GTalk @ 10.45 am.

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