• How the room rent limit affects your overall health insurance claim

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    f you think the limit on the room rent in your health insurance policy affects the costs incurred on the stay in a hospital room alone, you are wrong. The room rent limit, in most cases, indirectly decides the amount that will be covered for all expenses incurred at the hospital, by the health insurance company. Let’s understand what room rent capping is and how it has an effect on the overall health insurance claim.

    What is the room rent limit?

    Health insurance companies often lay down restrictions in terms of how much it will pay for a certain treatment or service. This is done in order to balance out the expenditures of the many policyholders of the company. With no limit, people may want to pick the most luxurious option since the insurer will pay for it anyway. In order to prevent this, the company adds clauses that limit certain benefits.

    The room rent cap is a commonly observed sub-limit in a health insurance policy. The limit differs from plan to plan and insurer to insurer. So, if Company A has a room rent cap of Rs.3,000 per day and Mr. X opts for an AC room in the hospital that costs Rs.4,000 per day, the extra Rs.1,000 per day will have to be borne by Mr. X.

    How room rent capping affects the overall claim

    The room rent cap, however, is not as simple as it is explained in the example above. Most hospitals charge patients as per the type of room chosen by them. A person who chooses a shared room and an AC suite might have undergone the same treatment or surgery from the same doctor but the hospital bills of the two patients will differ significantly. This is because the charges levied by the hospital for services provided by them depends on the room category chosen by the patient.

    Example:

    Let’s say Mr. A and Mr. B have the same health insurance policy with coverage of Rs.2 lakh and room rent limit of Rs.1,500 per day. Let’s assume both of them were hospitalised in the same hospital for the same surgery and opted for different room categories. Mr. A opted for a shared non-AC room and Mr. B opted for an AC room. Both the patients were hospitalised for two days and availed the same services but the hospital bills differed as shown below:

    Mr. A in a shared non-AC room Mr. B in an AC room
    Room charges Rs.3,000 (Rs.1,500 per day) Rs.9,000 (Rs.4,500 per day)
    Diagnostic tests Rs.4,000 Rs.6,000
    Surgery cost Rs.50,000 Rs.1,00,000
    Doctor’s fees Rs.6,000 Rs.10,000
    Cost of medicines Rs.2,000 Rs.2,000
    Miscellaneous charges Rs.2,000 Rs.5,000
    Total Rs.67,000 Rs.1,32,000

    The charges for Mr. B were higher as he opted for a more luxurious room option. He will be required to shell out more for all the charges, including miscellaneous charges like administration costs too. Since the room rent of the room chosen by Mr. A falls within the limit, his entire hospital bill will be covered under the policy, provided all services and costs are included in the policy.

    Though Mr. B has a coverage amount of Rs.2 lakh, the Rs.1.32 lakh spent by him will not be covered under the policy completely as he exceeded the Rs.1,500 room limit. Typically, insurance companies would calculate the costs proportionately based on the room rent limit. So, in this case, Mr. B will get coverage of Rs.67,000 as the costs incurred by him if he had chosen the Rs.1,500 room would’ve been Rs.67,000.

    How to get better coverage from plans with room rent limits

    As established, the room rent limit, that you may not have thought would affect your policy much, can have a major impact on the claim amount. However, there is no need to worry. Here are a few tips that could help you get optimum coverage from a plan that has a room rent limit:

    • When you purchase a health insurance plan, go through the policy carefully and ensure you take note of the room rent limit. If the limit is too low, go for a plan with a higher limit.
    • Check the policy before you confirm which room category you want in the hospital. Choose a room that has a rent lower than the room rent cap in your policy.
    • If you didn’t notice the fine print at the time of purchase or your agent did not explain how the room rent limit works and you have a policy with a low room rent limit, you can always port to a policy with a higher room rent limit or no limit at all. However, note that policies without room rent are slightly more expensive than those that have a limit.

    The room rent clause is a very small clause and can very easily go unnoticed, which is why it is important to read all the terms and conditions carefully at the time of purchase of the policy. In case of any queries with regard to the policy, one should always resolve them with the insurance agent before purchasing the policy.

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