How the hospital room rent cap affects your insurance entitlement
It is very important to understand the hospital room rental limits approved in your health insurance policy as this will be one of the main reasons insurers will decide on your claim. If you choose a hospital room (there are several types, including a general ward that you share with others, or a private room, or even a deluxe room, etc.) that comes with a higher rent than the eligible amount, we will If you do so, you will have to pay an additional room rate for the number of days you are hospitalized. In addition, when settling a claim, the insurer could also prorate other related costs such as intensive care unit costs or doctor’s fees. This means that you may have to pay the difference not only for the room rental, 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 the cost of care. The room rental cap plays a large role in determining the total amount an insurance company would pay to treat a patient with valid medical insurance. Because if you choose a room with a higher rent than the rent capped by the insurer, the additional expense caused by the more expensive room is also considered unbearable by the insurance company.”
Limitation of room rent: Health insurance companies usually limit the room rent to 1-2% of the insured sum. In some policies, however, the room rent is limited to an absolute amount. For example, if your sum insured is €5 lakh and the room rent cap is 1% of the sum insured, you can take a room in a hospital which costs €5,000 a day. If the room rent limit is an absolute amount, you must check this in the policy.
Vivek Narain, Health Insurance Specialist, SANA Insurance Brokers Pvt. Ltd, said: “Room rental in health insurance means the cost of being admitted to a hospital for more than 24 hours for medical reasons. Most health insurance policies typically have a cap or cap on the maximum amount of such expenses that you can claim from the insurer. This ceiling for room rental varies by tariff and insurance company.”
Kale said: “This room rent cap is for a specific period of hospitalization and will not affect your entitlement on your next hospitalization.”
Prorated input tax deduction: The prorated input tax deduction clause in health insurance allows the insurer to deduct the pro rata amount of all associated treatment costs in the same ratio of the exceeded room rent. For example, an insurer may allow this €4,000 as room rental for a day according to your policy. In case the patient takes a semi deluxe room, what is the cost €3,000, the rent cap does not apply. However, if the patient chooses a deluxe room €5,000. what is above the policy cap, then the extra €1,000 will not be paid by the insurer. In addition, a 25% prorated deduction will be applied to all expenses due to a higher priced room.
(Proportional deductions applied to other expenses = Excess of room rent paid/Actual room rent as per policy *100)
For example for a deluxe room that costs €5,000 could be the doctor’s consultation fee €1,000 but the insurer will only account for that €750 for claims settlement. Likewise, such deductions apply to all other expenses, including medications, tests, and surgeries when the room rental is high.
Prolonged hospital stay: Patients often ignore the room rent that is charged during the hospital stay. If the medical procedure requires a longer hospital stay, room rentals may increase significantly if you have elected to rent a room in excess of that permitted by your policy. In such a case, you may have to put extra money out of your pocket until you are discharged from the hospital.
For example, Vijay Pandey, a retired army officer from Agra, was recently hospitalized for knee surgery. He was hospitalized for 3 days and chose a hospital room with a rent of €5,000 per day, against his insurance policy limit of €4,000 per day. However, he miscalculated what the insurer would pay €5,000 per day, and that he would bear the difference in charges – from €1,000 a day for three days. However, this concept of renting a room did not work out according to Pandey’s calculations.
Little did Pandey know that all treatment costs were associated with room rental. He was also not aware that insurers apply the principle of proportional deductions when the room rent limit is increased. So he didn’t have to pay €3,000.00 surcharge for the three-day stay in hospital, but also a surcharge because of the proportionate deduction of around 25% on the total costs increased by a higher-priced room.
If you have health insurance and are planning a hospital stay of more than one day due to your medical condition, you should ensure that the cost of the room does not exceed the room rental. Also, it would be helpful if you also ask the hospital to disclose the room and nursing costs to know the actual room rent before the hospital stay.
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