How your health insurance claim can be much lower than the actual hospital bill?

Of-late, complaints against health insurance companies have gone up largely on account of dissatisfaction with claim settlement. This is mostly because customers are unaware of common features in health insurance policies that relates to sub-limits.

Normally, almost all health insurance policies have specific cap called sub-limits to the sum insured under which the insurer will pay the claim for different hospital expenses like Doctors’ fees, surgery/operation charges, nursing expense, medicine cost and room rent, all can have a specific cap. The claim for any expense is restricted to the sub limit for that expense.

The sub-limit for room rent is most important factor to consider the settlement of claim amount by the insurance company. This is because of the cap on reimbursement of claim for all other medical expenses are linked to the room-rent limit. The insurance companies to fix sub-limit for bed charges on the basis of sum-insured which is usually 1 per cent of the sum insured. For example you have taken health policy for Rs.2 lakh, insurance company fixes sub-limit of Rs.2000/- or lower to bed charges of the hospital. However, bed charges not necessarily at 1 percent of sum insured in all cases. For example, Bed charge in Group Insurance policy provided by United India Insurance co. to serving as well as retired employees is fixed at Rs.5000/-per day irrespective of sum insured. Further, there are some plans with no sub-limit on any of the medical expenses including room-rent irrespective of sum insured for which customer has to pay additional premium.

How room rent exceeding the sub limit impact on your claim settlement?

Hospitals charges are not same for the same services; they are different depending on the room type like General, Shared, Private, Deluxe, Super Deluxe etc. Suppose, your eligible room rent per day is Rs.5000/- and in case you have opted for a room rent of Rs.10000/- per day as another type of rooms are not available at the time of admission to hospital. Then not only additional room charges, but all charges of the hospital except cost of medicines with MRP would also be proportionately reduced when the claim is paid by the insurance company.

Illustration: Details of hospital bill of Mr. Arvind.  Insured sum: Rs.5 lac. Bed charge sub-limit: Rs.5000/- per day

Particulars	Bill amount(Rs.)	Sub-limit (Rs.)	Claim allowed
Room charges for 8 days	10000×8=80000	5000×8=40000	Rs.40000
Surgery Costs	Rs.120000	60000	Rs.60000
Doctor’s visits	1000×8=8000	4000	Rs.4000
Laboratory charges	5000	2500	Rs.2500
Medicines (MRP)	5000	5000	Rs.5000
Total	218000	71500	Rs.111500

Conclusion: Most of the people like Mr.Arvind believed that the deduction will be only on the additional room rent which is Rs.40000/-; but due to the differential price structure that hospitals operate on, Insurance companies deduct all differential charges proportionately, as explained in the above table. Mr. Arvind will receive insurance claim of Rs.111500/- against hospital bill of Rs.218000/- though the health insurance policy is forRs.5 lakh.

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Health Insurance: Is Top-up or Super Top-Up plan suitable for your needs?