In today’s times, health insurance has become a priority. It aims to provide financial protection during medical crises by covering hospitalisation expenses, medical bills and ambulance fees. Though health insurance plans, including family health insurance and health insurance for senior citizens, provide coverage to a certain extent, it has some limits. One of them is room rent limits.
In this blog, we will cover how the sub-limits of hospital room rent affect an insurance claim.
Understanding Sub-Limits
Let us start by first understanding the concept of sub-limits in health insurance.
Sub-limits refer to the percentage of the amount that the insurance company provides coverage for various hospital expenses. If the actual expenses go over and above the sub-limits, then the additional hospital expenses have to be paid by the policyholder. It is to be kept in mind that the sub-limit is not applied to the whole amount. Different sub-limits are applied to charges like operation/surgery charges, doctor’s fees, medicine costs, nursing expenses, room rent, etc. The sub-limit applied on the room rent is generally 1-2 % of the sum insured.
For example, you choose a
health insurance plan for family that provides a 1 % sub-limit on room rent, and the total insured sum is Rs 5 lakh. Here, you can choose a room that costs around 5000 per day. But if you choose a room that costs about Rs 6500 per day, then the policyholder will pay the remaining amount.
Room Rent and Health Insurance Policy
Room rent is the per day room or bed charges the patient makes after spending a few days in the hospital. If you have a health insurance policy, the insurer settles the room rent expenses along with other expenses that are covered under your health plan.
Let us explain this using an example -
Suppose a person has purchased health insurance for senior citizens with a daily room rent sub-limit of Rs. 2,000, and he/she chooses a standard room priced at 2000. In that case, the insurance provider covers the room rent charges as they fall within the policy coverage. Moreover, other medical expenses, doctor visits, nursing and diagnostics tests are all in the line of room rent and fall within the policy coverage.
In another case, the policyholder chose a deluxe room worth Rs 5000 daily. Here, the room rent is more than the sub-limit, and thus the policyholder has to pay an additional sum of Rs 2000 from his/her own pocket. This, in turn, increases the medical charges, doctor visits, nursing and other diagnostic-related fees.
So, opting for a health insurance policy with no room to sub-limit is always advised. These policies are more flexible and provide better coverage in cases where you require more days of hospitalisation and medical care.
There are primarily 4 different types of room rent coverage:
- Room rent without sub-limits
- Room rent with co-payments
- Room rent without sub-limits as an add-on cover
- Room rent with specified room types
Why is a Sub-Limit on Room Rent Important?
The room rent is one of the most important aspects when deciding which
health insurance plan to buy. In the majority of the plans, the limit on reimbursement of the claim is directly related to the room-rent limit. Moreover, all the medical costs are also associated with the same. So, it is always advised to select a room with a rent amount equal to 1-2% of the amount that has been insured.
Consequences of Exceeding the Sub-Limit
Not following the room rent limit affects your insurance claim negatively. If you go over the allowed room-rent limit, the insurance company will reduce the reimbursement limits for other medical expenses accordingly.
Different hospitals charge different rates for rooms depending on their type. If, for instance, you exceed the room-rent limit by 33%, say by choosing a room costing Rs 2000 per day instead of the mandated Rs 1500 per day room. Now, all other claim reimbursements will be reduced by the same percentage, that is, 33%. In this scenario, the insurance company will only pay part of the claim. You will be responsible for covering the remaining expenses independently.
What to Do When Faced with Room Rent Limitations in Health Insurance?
Understanding the room rent limit and how it relates to other expenses is crucial. You should inquire if the insurance provider manages third-party administration himself or if it the hospital handles it. Moreover, if there is some relation between the room rent and other hospital expenses, it is considered wise to go for a room that falls within the sub-limit of the said policy.
Health Insurance Plans without Sub-Limit
We should always opt for plans that do not have sub-limits on room rent or medical expenses, even if we must pay a higher premium. These policies offer more benefits, and some health insurance plans sometimes provide the option to remove the sub-limit by paying some extra premium.
Conclusion
While many health insurance policies outline various sub-limits in their brochures, the crucial clause about the equal reduction of the claim amount is typically found only in the policy document. To prevent partial claim settlements, either adhere to the room rent sub-limit or select a health insurance policy that lacks such sub-limits.
