It is very important to understand the hospital room rent limits approved in your health insurance policy, as this will be one of the main reasons insurers decide on your claim. In case you opt for a hospital room (there are several types, including a common room that you share with others, or a private room, even a deluxe room, etc.) with a rent above the eligible amount, you must pay additional rent for the number of hospital days. Additionally, the insurer could also proportionally reduce other related expenses such as ICU (intensive care unit) fees or doctors’ fees when settling the claim. This means that you may have to bear the differential amount, not only for the room rent, but also for the associated hospital costs.
Mayank Kale, Founder and CEO of Loop Health, said, “The definition of room rent is the cost of the room per night, including nursing costs. The room rent cap plays an important role in determining the total amount an insurance company would pay for treating a patient with a valid health insurance policy. The reason for this is that if one chooses a room whose rent is higher than what is capped by the insurer, the increase in charges due to the more expensive room is also deemed non-refundable by the insurance company. “
Room rent ceiling: Health insurance policies generally cap the room rent at 1-2% of the sum insured. However, in some policies, the room rent is capped based on an absolute amount. For example, if your face amount is ₹5 lakh and the room rent ceiling is 1% of the sum insured, you can take a room in a hospital which costs ₹5,000 per day. If the room rent limit is an absolute amount, you will need to check the same in the policy document.
Vivek Narain, Health Insurance Specialist, SANA Insurance Brokers Pvt. Ltd, said: “Room rental charges in health insurance refer to expenses incurred for internment in a hospital for more than 24 hours for medical reasons. Most health insurance policies usually have a cap or cap on the maximum amount of these expenses that you can claim from the insurer. This rent limit varies between plans and insurance companies.”
Kale said: “This rent limit applies to a particular period of hospitalization and does not affect your claim the next time you are hospitalized.”
Proportionate deduction: The prorated deduction clause in health insurance allows the insurer to deduct the proportionate amount of all associated treatment costs in the same report from the rent limit of the room exceeded. For example, an insurer might allow ₹4,000 as room rent for one day according to your policy. In case the patient takes a semi-deluxe room which costs ₹3,000, rental cap does not apply. But if the patient decides to occupy a deluxe room for ₹5,000. which is beyond the policy cap, then the supplement ₹1,000 will not be paid by the insurer. In addition, there will be a proportional deduction of 25% on all expenses due to a more expensive room.
(Proportional deductions applied to other expenses = Excess rent paid / Actual rent limit according to the policy * 100)
For example, for a deluxe room which costs ₹5,000, doctor’s consultation fee could be ₹1,000 but the insurer will only consider ₹750 for claims settlement. Likewise, these deductions will apply to all other expenses, including medications, tests, and surgery, if the room rent is high.
Prolonged hospitalization: Patients are often unaware of the room rental charges collected during hospitalization. In the event that the medical procedure requires an extended hospital stay, room rental charges can add up to a substantial amount if you have opted for a higher room rent than approved in your policy. In such a case, you may have to shell out extra money from your pocket until you are discharged from the hospital.
For example, Vijay Pandey, a retired army officer based in Agra, was recently hospitalized for knee replacement surgery. He was hospitalized for 3 days and chose a hospital room with a rent of ₹5,000 a day, against the limit of his insurance policy of ₹4,000 per day. However, he miscalculated that the insurer would bear ₹5,000 a day, and that he would bear the difference in charges – from ₹1,000 a day for three days. However, this room rental concept didn’t work by Pandey’s reckoning.
Pandey was unaware that all of the processing fees were associated with the room rental fee. Nor did he know that insurers apply the principle of proportional deductions if the cap on the room rent was raised. Therefore, he had to pay not only ₹3,000 additional for the three days of hospitalization but also an additional amount due to the proportional deduction of approximately 25% on the overall expenses which have increased due to a more expensive room.
If you have a health insurance policy and plan to be hospitalized for more than one day due to your medical condition, you must ensure that the cost of the room does not exceed the room rental limit. In addition, it would be helpful if you also ask the hospital to disclose room charges and nursing fees to know the actual room rent before hospitalization.
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