Room rent plays a major role in the total cost of your treatment during hospitalization. If the rent exceeds the limit specified in your policy, you may have to pay a higher bill for the same treatment.
Health insurance policy has become a big necessity today. It saves you from hospitalization and huge expenses on treatment and medicines in case of medical emergency. In plain words, the insurance company bears this entire expense under the policy.
However, policyholders are often not aware of the various nuances of health insurance products. Due to this many times there are problems in Mediclaim. One of these nuances is…hospital room rent ie room rent capping.
Room rent plays a major role in the total cost of your treatment during hospitalization. If the rent exceeds the limit specified in your policy, you may have to pay a higher bill for the same treatment.
The rental limit is up to 01% of the health insurance policy amount
What is Room Rent Capping
Room rent capping or room rent capping is the limit that insurance companies bear for room rent on hospitalization of the policyholder under a health insurance policy. The rental limit is usually up to one per cent of the policy amount. If you have a health insurance policy of Rs 5 lakh, then the insurance company will pay only a maximum of Rs 5,000 (one percent) per day for room rent in case of hospitalization.
If the rent is high then the cost increases
Insurance companies resort to a concept called ‘proportionate deduction’ while settling claims if the room rent exceeds the limit specified in the policy. According to this, the insurance company will deduct from all related expenses related to the treatment in the same proportion in which the room rent exceeds the prescribed limit. This is called room rent co-pay.
- In fact, many hospital charges such as doctor visits, operation charges or investigation charges are directly linked to the room rent.
- All these charges for the same treatment may vary depending on the room category chosen.
- A surgery costing Rs 15,000 for a twin sharing room can go up to Rs 20,000 for a single AC room. The cost for a suite room can reach up to one lakh rupees.
This is how you can eliminate the hassle of capping:
While buying a health insurance policy, complete information about the terms and conditions related to room rent capping should be taken. This does not cause any problem in the claim. Some insurance companies offer ‘room rent co-pay waiver’ as an add-on. The room rent capping in the policy can be removed by paying a nominal additional premium. -Bhaskar Nerurkar, Head Health Administration Team, Bajaj Allianz General Insurance
Understand the whole math like this…
Suppose, you have a health insurance policy of Rs 3 lakh and the room rent capping is 1% i.e. Rs 3,000. But, due to lack of information, you took a room with a rent of Rs 4,000 per day. You had surgery and you were hospitalized for three days. The total expenditure on rent for three days came to Rs 12,000, but the insurance company would pay only Rs 9,000 for Rs 3,000. You will have to pay an additional Rs 3,000 from your pocket.
- The matter does not end here. In this case, the proportionate deduction on medical expenses at 75% (rent limit/actual rent x 100) will be applicable.
- So if the cost of the surgery is Rs 50,000, it will come down to Rs 37,500 after proportionate deduction. That is, the insurance company will pay only Rs 37,000.
- Similarly, other expenses will also be cut. However, there is no proportionate deduction on medicines as these are sold at MRP and do not form part of the related treatment expenditure.
