Health Insurance Claims: How Do They Work?

Last Updated: Tue, Nov 27, 2012 09:03 hrs

One of the side effects of visiting a new doctor or a different hospital is having to fill out another of those insurance claim forms. Rather than grumble about their length, appreciate that this helps ensure that healthcare bills do not leave you broke. So how does a health insurance claim work? It usually goes like this: once you furnish your insurance details, the doctor or hospital bills the insurance provider for your medical expenses.

Then again, this is only part of the big picture. Since health insurance comes in handy frequently, it helps to be familiar with the various steps involved in processing a claim.

Healthcare Providers

The claim process begins much before the submission of the claim form. If you will be making a claim, visit a doctor or a medical institution associated with your insurer. Such healthcare providers bill the insurer directly. You, the beneficiary, are only required to pay the excess or a co-payment on your coverage.

When the healthcare provider is not associated with your insurer, you will need to furnish your insurer with the bills and paperwork. The insurer will provide payment cheques accordingly. Again, any excess will come out of your pocket.

Payment Requirements

Before seeking medical care, check for potential out-of-pocket expenses such as deductibles and co-payments. Insurers may require you to foot part of the bill for specific treatments and procedures. For example, senior citizens are often required to co-pay part of the bill, usually about 20 percent. Co-payment safeguards the insurer against beneficiaries needing frequent medical attention, but can be an expensive proposition for chronic patients.

The Claim Form

The claim form that you fill in at the medical institution carries a wealth of information. Apart from your policy number and insurer's name, the form requires details about the illness or injury needing treatment as well as details and charges of medical services rendered. These details are confirmed by the doctor or attending healthcare professional.

Claim Verification

Once you submit your insurance details and copies of your insurance ID, the healthcare provider contacts the insurer to verify your eligibility and find out whether you have coverage for specific services. The form is then sent to your insurance company.

Claim Review

The insurer studies the claim form to ensure that it is error-free and examines the treatments carried out and services rendered. If everything is in order, the insurer either pays the provider directly or sends a cheque to the beneficiary to pay the provider. If the patient has made upfront payments, the insurer reimburses him/her after accounting for out-of-pocket expenses like co-payments and deductibles.

Claim Follow-up

Health insurance claims generally pay out in about 30 to 60 days. If there is a delay, the insurer usually sends a letter explaining the hold up for payment. If no such letter arrives, then follow-up becomes necessary.

Why Are Claims Denied?

Sometimes, claims are denied. There are various reasons for this. One common reason is that the procedure is considered experimental or unnecessary. It could be that the treatment is not covered by your policy. Errors in your form could also lead to rejection of your claim, as could the claim's not being filed in time. Whatever the reason, consider resubmitting your claim and requesting a formal review by a healthcare professional from the relevant field.

Deepak Yohannan Deepak

The author is the CEO of, an online insurance price & features comparison portal

For more articles by Deepak Yohannan, please visit

You may write to the author at


More from Sify: