Differences Between Health Insurance and Mediclaim

Top Must-Know Differences Between Health Insurance and Mediclaim

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Health insurance coverage has become a primary issue for everyone, even more so in light of the present COVID-19 pandemic. There is no dispute about the critical nature of health insurance coverage in India, owing to the country’s poor ranking on the human life index. In modern-day India, medical care expenses are at an all-time high, while an increasing number of individuals are facing health problems due to an unhealthy lifestyle. 

With a high cost of living and a relatively low income, medical treatments are too expensive for families regardless of whether they reside in a metropolis or a rural village. It becomes vital to obtain health insurance that covers medical expenditures, treatment costs, laboratory charges, hospitalization costs, and critical illness costs. 

One might have heard about health insurance and mediclaim. These phrases are sometimes used interchangeably; however, they are distinct. The primary distinction between the two is that mediclaim is limited to hospitalization expenditures, whereas health insurance, on the other hand, is significantly more comprehensive. It provides complete coverage that extends beyond hospitalization costs. This article will explain the primary differences between health insurance and mediclaim policies and will aid in your comprehension and evaluation.

What is mediclaim insurance?

Mediclaim insurance is a form of health insurance coverage covering hospitalization and specific conditions. It is comparable to a low-cost health insurance plan. However, you must make a trade-off in terms of coverage and one of the top differences between health insurance and mediclaim.

Mediclaim Insurance - Differences Between Health Insurance and Mediclaim

How does a mediclaim insurance plan work in India?

In essence, a mediclaim policy covers two types of claims:

Cashless

It is a procedure in which the insured gets treated in hospitals that are a part of the insurer’s policy. Under this arrangement, the insurer will pay the hospital a portion of the claim or the whole amount. This implies that the insured does not have to pay anything out of pocket as a result of this provision. Various processes must be followed to make a basic claim.

Each network hospital has an insurance desk on-site from which the insured may get a pre-authorization form. They must complete the form completely and accurately. By providing incorrect information, you have a risk of not receiving your claim on time.

Reimbursement

In this system, it is critical to notify the insurance provider about any hospitalization that has occurred or is likely to happen. You may accomplish the same thing via phone or email. To ensure prompt reimbursement, you must supply all necessary documentation, including payment receipts, pharmaceutical invoices, and more. As a policyholder, you must keep the original discharge card, closure invoices, and expense receipts in one location until they may be submitted to the insurance provider for payment.

What is health insurance?

Health insurance is a contract between an insurer and a policyholder. A health insurance coverage protects you financially against the expenditures of medical treatment, hospitalization, diagnostic tests, and other healthcare requirements. In a nutshell, it offers financial coverage for the policyholder’s, i.e., the insured’s healthcare bills.

Health Insurance - Differences Between Health Insurance and Mediclaim

A health insurance policy gives significant financial relief offering features such as affordable rates, extensive coverage, and the possibility of cashless treatments. Additionally, the insured may get tax benefits on the premiums paid (Section 80D of the Income Tax Act, 1961).

How does a health insurance plan work?

Health insurance firms provide a variety of plans to suit a variety of demands, age groups, and conditions. Customers can select a plan that meets their specific requirements. Anyone may have multiple health insurance policies as different health insurance plans adhere to a variety of medical procedures and rules.

Now let’s talk about types of health insurance which are far more in number than mediclaim and another point in the list of differences between health insurance and mediclaim:

Individual Health Insurance

These policies are designed for a single insured person, in which the whole sum covered is applied to the insured person alone.

Family Floater Insurance

These policies cover entire family members covered by the policy. Therefore, the money insured may be used in whole or in part by one/many/all members.

Group Health Insurance

Employers give health insurance to their employees. These insurance plans are called group health insurance, covering several persons under a single policy.

Senior Citizens Insurance

These policies are created specifically for seniors 65 years and above. Senior folks typically pay a greater premium for health insurance due to the increased likelihood of developing health problems.

Critical Illness Insurance

Certain health insurance policies are designed to cover the expenditures associated with acute or chronic disorders. Diabetes, cancer, heart and cardiovascular disorders, hypertension, and other linked conditions are among these diseases.

Disease-Specific Health Insurance

These plans are meant to cover just the diseases stated in the policy, such as COVID-specific insurance, maternity-specific insurance, and heart-specific health insurance.

Health Insurance Buying Cycle

Purchasing health insurance is a more difficult task than it appears and an important point to consider when analyzing the differences between health insurance and mediclaim. These are some critical actions taken to ensure that the health plan you buy fulfills you and your family’s needs. Health insurance is indeed an investment, and if not obtained prudently, it may become an expense. It is critical to begin by assessing your own and your family members’ healthcare needs. Consider the following:

  • Discuss family planning and maternity health insurance for the young generation.
  • Individuals with a big family must analyze the healthcare requirements of each family member – old parents, small children, siblings, and senior grandparents.
  • It will assist you in determining if individual plans for various family members would be more appropriate for you. Calculate the required amount of sum insured.
  • Remember to account for inflation. In India, medical inflation is the largest component of overall inflation.

Once you have decided on an insurance plan, provide all needed information completely and accurately. Any differences may result in the policy or claim being denied during hospitalization or other medical emergencies.

How much does health insurance cost?

Numerous variables contribute to the cost of health insurance. The cost of health insurance varies according to the individual’s demands and circumstances. Individuals pay varying premiums. The most fundamental elements affecting the cost of health insurance premiums are as follows:

Health Insurance Cost - Differences Between Health Insurance and Mediclaim
  • The older a person is, the higher the premium. In the event of a family floater, the premium is determined by the oldest member’s age.
  • Way of life and the current state of health.
  • Pre-existing diseases and serious illnesses.
  • Occupation and earnings.

The Claim Process for Health Insurance

It is nothing more than a policyholder’s request to the insurance company to compensate for the policyholder’s medical treatment expenditures. Claims are classified into two categories:

Cashless

A cashless claim is an arrangement between the insurer and network hospitals that allows policyholders to receive treatment without paying anything. The insurance pays the hospital directly in this kind of claim. 

The policyholder is not required to make any payment. Here are some steps to explain the cashless procedure:

  • Seek treatment in a hospital part of the insurance policy’s network.
  • Fill out a claim form for your health insurance coverage at the hospital.
  • The insurance company issues permission to the hospital or initiates a review if any information is lacking.

Reimbursement

The policyholder is responsible for making the payment to the hospital, which the insurer subsequently repays following the reimbursement method outlined below:

  • The policyholder must complete and submit a claims form to the insurer, along with medical and hospital expenses.
  • The insurer then investigates the papers.
  • If the insurance company approves the claim, it issues an acceptance letter.
  • In the event of rejection, the policyholder receives a rejection letter along with the grounds for denial.

Features and Benefits of Health Insurance

While health insurance policies cover medical expenditures, that is not all they cover. A thorough study of the medical insurance policy’s characteristics can assist you in selecting the finest coverage for you and your family. Consider the following aspects of health insurance coverage:

Online Application and Renewal

Online Application and Renewal - Differences Between Health Insurance and Mediclaim

Even the insurance industry has embraced digitalization in today’s environment. All of India’s leading insurance companies now provide the option of applying for health insurance online. Their websites are constantly updated and provide a variety of services that a consumer may require, including information, application, renewal, status information, and contact information. It enables an interested individual to conduct research online and apply from any location and at any time that is convenient for them.

Health Check-Ups

Carriers of health insurance have partnered with a variety of medical institutions and diagnostic institutes around the nation to provide their members complimentary yearly whole body health tests. It encourages policyholders to live a healthy lifestyle and to be health-conscious. Additionally, it enables policyholders to keep track of their health information every quarter.

Family Concessions

Family Concessions - Differences Between Health Insurance and Mediclaim

Policyholders who enroll family members or any other individual in the insurance plan earn concessions and loyalty from the insurer in exchange for bringing new clients.

Renewable for Life

It is impossible to foretell who will remain fit for an extended period. Even people who have maintained a healthy lifestyle throughout their youth may have issues later in life. To remedy this, health insurers provide the option of perpetually renewing insurance coverage. When a policy expires, it may be renewed immediately, even online.

Tax Benefits on Paid Premiums

Tax Benefits on Paid Premiums - Differences Between Health Insurance and Mediclaim

Under section 80D of the Income Tax Act, 1961, health insurance policyholders may claim tax benefits on the amount paid as health insurance premium.

What are the differences between health insurance and mediclaim?

For a long period, the terms mediclaim and health insurance were used interchangeably. While both these policies cover hospitalization and medical expenditures, they offer distinct types of protection. Below, we address the fundamentals and provide an overview of the differences between health insurance and mediclaim:

Pre and Post Hospitalization Expenses

A mediclaim coverage covers hospitalization expenditures up to a set amount and for a specified period, as well as home care in certain circumstances. The claim cap is calculated as a proportion of the overall hospitalization costs. Health insurance, on the other hand, covers pre-and post-hospitalization treatment, diagnostic testing, and physician fees, among other things.

Ambulance Charges

Ambulance Charges - Differences Between Health Insurance and Mediclaim

If you get gravely ill, you will need to be transported to and from the hospital in ambulances. Even if you are hospitalized, you may need to be transported via ambulance to another hospital or testing center for advanced diagnostics. Mediclaim does not cover these expenditures. On the other hand, health insurance programs reimburse these costs up to a certain amount.

Maternity Benefits

A health insurance policy includes coverage for expenses paid before, during, and after childbirth for mothers—whether it is a cesarean section or any other medical care for the infant. However, mediclaim only covers hospitalization costs and excludes all other out-of-pocket payments and is an important point in the list of differences between health insurance and mediclaim.

Daycare Procedure

Daycare Procedure - Differences Between Health Insurance and Mediclaim

Typically, a mediclaim is restricted to hospitalization and specified ailments. However, daycare treatments like cataract surgery are often not required to be hospitalized beforehand. In this instance, your medical insurance will not cover these expenses. However, the costs associated with such medical treatments are typically covered by ordinary health insurance.

Cost

Due to the more extensive coverage of health insurance policies compared to mediclaim, health insurance is typically more expensive when considering the differences between health insurance and mediclaim. However, it more than compensates for the premiums paid when you become ill.

Number of Claims

When you purchase a mediclaim or health insurance coverage, you can make as many claims as you like under the mediclaim policy. However, if your baseline sum insured has been depleted, you will not be covered for any medical bills.

Which is more advantageous – mediclaim or health insurance?

Insurance Premium - Differences Between Health Insurance and Mediclaim

As previously stated, mediclaim is more limited in scope than health insurance, and in the event of mediclaim, you are not responsible for any out-of-pocket expenses. The same cannot be said for health insurance. Health insurance is a small package that offers benefits proportional to the premiums paid. Remember this important point when considering the differences between health insurance and mediclaim.

To Sum It Up

Before getting a health insurance policy, evaluate your insurance expectations and compare several insurance policies that meet those goals. For you, the best health insurance company in India is one that meets your insurance needs, such as Vital, which offers life insurance and specialized tax-saving choices.

If you want complete coverage and are willing to invest a significant amount of money each year to protect your finances, you should get an appropriate health insurance policy.

If you are on a limited budget and are okay with a basic level of health coverage, you can go for a mediclaim health insurance plan. These plans are less expensive than comprehensive health insurance policies. However, they do not provide comprehensive coverage. 

It is preferable to have some insurance coverage than to have none at all. While group plans, such as those supplied through your workplace, may provide some coverage, they are not trustworthy over time because of their restricted features. As such, it is very essential to first take into consideration the list of differences between health insurance and mediclaim before making a purchase.

FAQs

Q1. Which is the superior product: mediclaim or health insurance?

The answer is contingent upon your specifications. When comparing the differences between health insurance and mediclaim, there is no clear winner.

Q2. Is basic mediclaim coverage available from all insurance providers?

Mediclaim policies supplied by various insurance firms may have varying inclusions and exclusions. Please read the policy’s small print to determine the policy’s extent of coverage.

Q3. Is purchasing long-term health insurance coverage possible?

Yes, it is feasible to obtain longer-term health insurance coverage. Certain insurers give a reduction on long-term insurance premiums.

Q4. How to verify insurance policy wordings?

You can review the insurance’s policy wordings by downloading them from the insurer’s website, visiting a branch office, or coordinating with an agent.

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