What is the room rent limit in health insurance plans?

New Delhi : The limit imposed on the coverage of boarding expenses or room rent of the hospital is called the room rent limitSedentary lifestyles, rising pollution levels, and the ever-augmenting instances of chronic ailments haves led  the Indian population to own a health insurance plan. Policies like the Niva Bupa health insurance plan help streamline caring for the health and well-being of your loved ones by shouldering the financial burdens of such unpredictable medical emergencies.

Despite the growing inclination to owning health insurance plans, there still seems to be a lot of grey areas in terms of the nitty-gritty of such policies. Room rent is one common term that remains important to policyholders when settling hospitalisation claims. 

What is a room rent limit?

You incur a certain amount of admission charges that your health insurance plan should cover during your hospital stay. However, insurance companies impose a cap on the room rent coverage amount. The room rent cap refers to the upper limit imposed on your hospital room rent by your insurance provider. In other words, it’s the maximum amount you can claim from your health insurance provider in the event of hospitalisation.

In most cases, this capped amount is calculated by your insurance provider as a certain percentage of the sum insured, while in others, it may be mentioned as an absolute sum. For instance, if your sum insured is Rs. 3 lakh, and your room rent is calculated as 1% of this value, you will be eligible to claim Rs. 3,000 as your daily room rent limit. Thus, if your daily room charges are Rs. 4,000, your health insurance plan will only cover a part of it the additional Rs. 1,000 must be spent out of your pocket.

Types of health insurance plans and room rent limits

● Health insurance plans without room rent sub-limits - Such health insurance plans trade in the room rent sub-limit feature, offering the policyholders complete autonomy over the type of room they want to select. The policy provider covers the entire hospitalisation expense for the individual. For instance, Niva Bupa health insurance plans come with the benefits of no room rent capping on a policy with a sum insured of more than Rs. 5 lakh.

● Health insurance plans with co-pay on room rent - With such insurance plans, a part of the room rent is covered by the insurance provider, while the policyholder must bear the remaining expenses.  

● Health insurance plans with rent caps for specific types of rooms - Unlike the health insurance plans with rent caps, these plans specify the type of room the insured individual can opt for in hospitalisation. Whether you can select a twin-sharing recovery room or a private one will depend on the clause outlined in your health insurance policy document.  

● Health insurance plans with no room rent cap riders - Lastly, to opt -out of this sub-limit clause that circumscribes your room choice or forces you to pay out of your pocket, you can pick a health insurance plan that comes with add-ons that eliminate such caps. However, you will have to incur an additional cost when opting for such a waiver.  

Importance of room rent

While most policyholders may believe that the relevance of room rent extends to just the daily room expenses, it has more relevant and far-reaching implications for the overall treatment cost and claim settlement process. Your room rent is important in the two following ways:

● Treatment costs - Hospitals fix treatment costs according to the room rent-paying capacity of the patient. Thus, all treatment expenses, such as medicines, procedures, doctor’s fees, diagnostic charges, and surgical expenses,- are determined by the patient's type of room. For instance, the same procedure may cost Rs. 20,000 for a patient who opts for a twin-sharing room, while it costs Rs. 30,000 for a patient in a deluxe suite.

● Claim settlement process - If you pick a hospital room that exceeds the limit outlined in your capped health insurance plan, your overall claim settlement amount will be reduced on a pro-rata basis. This is because room rent calculations are based on the concept of proportionate deductions that are estimated as proportions of the room rent limit to the actual room rent. For instance, if you’re eligible for room rent equivalent to Rs. 3000 but opt for one that costs Rs. 6,000, your overall claim will be reduced by the insurance provider by 50% on a pro-rata basis.

Solving the room rent puzzle

You can simplify this room rent dilemma by opting for a no-cap health insurance plan. Policies like the Niva Bupa health insurance plan come with a high sum insured amount that eliminates the sub-limits on your room rent. Moreover, it is important to assess the fine print on policy documents to avoid partial claim settlements.

Summary

Room rent is one of the most salient, yet often neglected concepts in health insurance plans. While coverage umbrellas, network hospitals, cashless claim settlement processes, etc., remain important factors that policyholders review, most miss reviewing room rent caps before purchasing health insurance policies. Since room rent caps can significantly impact the claim settlement process and the final compensation the insured individual receives from the policy provider, it is best to opt for no-cap plans like the Niva Bupa health insurance plan.