Whenever one is going to shop for a suitable health insurance company, there are lot many factors which one has to look into.
But today, i am going to share with you THE MOST IMPORTANT FACTOR which one should look at and that is “Room Rent Capping”
Lets understand this how “room rent capping” affects your claim and what can be done to avoid the same.
There are 2 types of room rent capping:
1 – Capping on room rent on a % basis: Let’s straight away try to understand this with the help of an example. Suresh has a Mediclaim policy of Rs. 3,00,000 in which there is a room rent capping of 1% of sum assured which comes to Rs. 3000 (3,00,000*1%) room rent limit on a per day basis. He met with an accident and was hospitalized for 4 days. The rent of the room in which he was hospitalized was Rs. 4500 per day. Now total expenditure on 4 days was Rs. 2,00,000 which includes Rs. 18,000 (4500*4) as room rent and the balance Rs. 1,82,000 (2,00,000 – 18000) as other expenditure.
Now in this case if I ask you how much claim would Suresh get from the insurance company. Most of us would Say Rs. 1,94,000 (1,82,000 +12,000) This figure we arrived at after deduction of Rs. 6000 (1500*4) from the room rent. His eligibility of room was for Rs. 3000 on a daily basis but he got admitted to a room whose rent was Rs. 4500 that is Rs. 1500 extra. Since the stay was for 4 days , hence insurance company would not pay Rs. 6000 (1500*4).
But this is not how the claim would be calculated. Generally in a hospital, all other charges are linked to room rent. So if there is a violation of room rent limit, the insurance company makes the reimbursement on a pro rata basis. So in the above example, the insurance company will find out Rs. 3000 (room rent eligibility) was how much % of Rs. 4500 which comes to 66.67%. Actual claim was Rs. 2,00,000. So, instead of paying Rs. 2 Lac, insurance company would reimburse only Rs. 1,33,333 (2,00,000*66%).
2 – Capping on room rent on “Room Category” basis: This one is very tricky although insurance companies will not accept this. To explain the same in detail, refer to the image below which is the room rent rate of one of the premier hospital.
Observation in the above image:
● There are 7 different categories of room which one can choose for taking treatment.
● You take any category and you will find that higher the room category, higher will be the charges.
● Even advance deposit differs as per the room category.
● But i want to bring your attention to the room rent row titled as WARD. If you opt for the common category, per day rent would be Rs. 950 which goes upto Rs. 22,000 for Suite room
● Looking at the room rent category, it seems that “common”, “economy” and “Twin” are available on a shared basis which means more than one person is staying. And from “special” onwards , single pvt room is available.
● So even, someone wants to opt for the single pvt room, one can choose from 4 different categories which are “special”, “Deluxe”, “super Deluxe” and “suite”.
Now lets understand how capping on room rent category works. There are many insurance companies who says they are offering “Single Pvt Room” but when you look at the policy wording document their definition of “Single Pvt Room” is lowest category of single pvt room within the hospital with basic amenities like AC, attach bathroom and one extra bed for the caretaker of patient. So as per the definition, looking at the above image, the lowest category of single pvt room would be “special” room . So in this case, if a person opt for “Deluxe” room, then claim would be paid on pro rata basis as mentioned above.
My take:
➢ “Room category” capping is better than “% Capping”: Taking above example only, Rs. 3000 (1% of sum insured of Rs. 3 lac) might seems good today but what about 5 years down the line . The room which i am getting today, the same room’s rent will increase going forward and i wont be able to get it again at Rs. 3000. But in case of “room category” capping, i need not worry about the inflation, bcz capping is on “room category” irrespective of the rent of that particular category of room.
➢ Ideally opt for a policy, which does not have any capping in room rent. Neither in terms of % nor in terms of category also.