Room Rent Capping: Room Rent Limit in Health Insurance
Every health insurance plan comes with a set of components that can drastically change the claim amount during the time of billing. One such is the room rent limit for specific room types. What does this mean? Let’s dive deeper into this feature.
To begin with, the hospital room rent limit is nothing but the specific amount of rent you pay for staying in a hospital. In case you are required to get hospitalized for a few days. You will occupy a bed or opt for a room in the hospital.
For this service, room charges will be levied on a daily basis. The amount is usually a specific percentage of the sum insured.
For example: If your healthcare plan has a sum insured of Rs. 2,00,000, then the room rent limit will be within the range of 1%-2% of the SI cover (Rs. 2000 to Rs. 4000 per day; this is different from one policy to another).
Before we get into the importance of room limits in your healthcare policy, let us understand the different types of limits across plans and health insurance companies.
Types of Room Rent Coverage
Room with Sub-Limit
Just like the word suggests, sub-limit is the limit to which your policy will cover medical treatment. This means that the cost of hospitalization will be covered only up to the limit mentioned in the policy document.
For example: If your sub-limit for doctor consultation is only 2% of the sum insured (SI = Rs. 2,00,000), you will only be reimbursed for Rs. 4000 (2% of 2,00,000) even if the doctor’s fee comes to Rs. 10,000.
What happens if you exceed this sub-limit? – When your expenses go over and above the sub-limit, your mediclaim will not cover the extra amount, and you will have to pay from your pocket. In addition, your insurance provider might reduce the sub-limits for other types of hospitalization charges.
Room without Sub-Limits
As per this plan, there is no capping or limit/sub-limit on the room rent amount. You are entirely free to select the type of hospital room you want (single, private, deluxe, shared, and more).
Room with Co-Payment
Under this option, the insurer is required to share the expenses for the room limit up to a fixed amount.
For example, you were admitted to the hospital for five days, and the room rental invoice comes to Rs. 20,000 (Rs. 4,000 per day), and the co-payment on the room limit is 50%. The insurer will pay Rs. 10,000 (50% of Rs. 20,000).
Still, confused? Let’s learn more about how this works.
Room Rent Limit – How it Works?
Suppose you have a comprehensive health insurance coverage policy that comes with a rent limit of Rs. 2,000 (1% of SI | Rs. 2,00,000). But you select a room that costs Rs. 8,000 per day and are hospitalized for five days.
The total bill comes to Rs. 2,00,000. Ideally, you will assume that the amount required to be paid from your pocket will be the difference between rent (Rs. 30,000 (Rs. 6,000 x 5) >> Rs. 8,000 – Rs. 4,000).
Well, this is not the case. Here is a complete split-up of the hospital bill that you will have to pay.
Type of Charges:
Room Rental
Hospital Expenses: Rs. 40,000
Paid by Insurer: Rs. 10,000
Surgeon’s Fee*
Hospital Expenses: Rs. 1,00,000
Paid by Insurer: Rs. 33,000
General Physician*
Hospital Expenses: Rs. 15,000
Paid by Insurer: Rs. 3,750
Medical Tests*
Hospital Expenses: Rs. 35,000
Paid by Insurer: Rs. 8,750
Cost of Medicine
Hospital Expenses: Rs. 10,000
Paid by Insurer: Rs. 10,000
Total Bill
Hospital Expenses: Rs. 2,00,000
Paid by Insurer: Rs. 65, 500
The total amount paid by you will be Rs. 2,00,000 – Rs. 65,500 = Rs. 1,35,500/-
Note:
- The table represents a standard case for a five days hospitalization period. The medical expenses, personal accident insurance, rent limit in health insurance, and treatment covered are different under each policy and insurance company limited.
- *25% of the proportionate deduction has been applied.
The bill seems like a shocker during health insurance claims! This is where we will introduce you to the concept of proportionate deduction. This is applicable when selecting a room that costs over and above the rental limit prescribed by your medical cover.
Your health cover provider will only pay for the bills in proportion to the allowed rent. For the case mentioned above, the proportionate deduction is 25% (Room rent allowed/Room rent charged >> Rs. 2000/Rs. 8000)
Why does this happen? – Well, hospitals in India charge a patient based on the type of room they can afford. Be it shared, private, deluxe, or more, each room comes with its own set of charges. Keeping this in mind, hospitals deduct charges over your room eligibility along with the associated costs of renting the specific room variant.
How to Select the Best Health Cover?
- If you are getting a new policy, go for a plan that offers no capping on room rental limits.
- Select a higher sum insured. Since the room limit is directly proportional to the SI cover.
- You can also avail of a sub-limit as an add-on to your base plan at the cost of an additional premium.
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