Room Capping: Is It Something Important While Buying A Online Health Insurance Plan?

We often had been complaining post buying a financial product that I been cheated and something similar to that. But if you technically ask a financial expert he/she will show you a different scenario altogether, generally we fall in trap of financial products because we generally fail to connect the offering under the same with our financial goals .A similar thing can also happen in case while you are buying a health insurance .

The truth is that there are lots of features in your health insurance policy also which if you have understood well and used judiciously then you can preferably generate the best value from the money that you spent on your premium.

Room capping or no capping is a feature which exists in any health insurance policy. Under a plethora of benefiting features which are part of any health insurance offering what you get as claim from your insurance company post any medical emergency is something everybody is looking into.

Let’s first under the concept of Room capping in detail and then understand why it is important.

 Any point of time when you are faced with a medical emergency and you are admitted into a hospital or a medical care one of the major cost that you generally pay to your hospital is the cost of bed or room which you use during your stay in the hospital. Your hospital may have different types of room offerings from a general ward without AC or shared ward with AC and even things like private rooms or suites. When your policy document says that it will cover your medical cost, room rent is also cost is covered under it. The amount of cost that is covered under a particular policy would solely dependent on that amount of sum assured you applied for .Higher the sum assured applied for ,the probability of having capping reduces.

Now the question is how the capping affects the overall benefits that you enjoy under a policy?

Considering a case, suppose you have health insurance plan with sum assured value of Rs.4, 00,000 and under it the maximum capping on your room rent is Rs.4000 per day which is like 1% of your sum assured. Now to understand the effect of this capping on your overall benefits let us consider two scenarios:

Scenario 1: Say during the process of hospitalization you were able to get a bed or room facility which is exactly equal to the capping you have on your policy and you stayed in the hospital for next 5 days 

  What You paid      What You Got As Claim     Claim Amount Paid Explained 
  Room rent          4000x5=Rs.20000 Rs.20000 As per eligibility
Surgery cost Rs.100000 Rs.100000 As per limits
Doctor visits Rs.5500 Rs.5500 As per limits
Medical cost Rs.4500 Rs.4500 As per limits
Medicines Rs.10000 Rs.10000 Based upon MRP of the medicine
Total Rs.140,000 Rs.140000  

In a situation like this the insurance company pays for all your expenses and nothing is deducted but once you go through second scenario how much loss you actually make though you have been paying your premiums regular is something to understand

Scenario 2: Suppose you fall into situation where when you looked at the room been offered by the hospital which falls under your capping limits is not in a good condition so you were forced to opt for facility which you might have to pay an amount which is much higher that available limit offered by your insurance company.

As per general understanding that your insurance provider would only not pay for the extra amount that you have paid for your room rent and rest everything that you have paid would be covered exactly in the similar fashion what you have seen in scenario 1  above but things become very different when you actually made a claim. Let’s see how it is different-

  What You paid      What You Got As Claim     Claim Amount Paid Explained 
  Room rent          8000x5=Rs.40000 Rs.20000 As per eligibility
Surgery cost Rs.100000 Rs.100000 Proportionate deduction
Doctor visits Rs.5500 Rs.5500 Proportionate deduction
Medical cost Rs.4500 Rs.4500 Proportionate deduction
Medicines Rs.10000 Rs.10000 Based upon MRP of the medicine
Total Rs.160,000 Rs.85000  

 

You actually would be surprised to see that you actually ended upon paying Rs.55000 of your medical cost out of your own pocket though the claim that you made is quite within the limits of your sum assured.

The situation can quite astonishing when you fall into a situation like this and actually able to realize the importance of how the capping actually affects.

What should you do now?

  1. Health policies are bought with the objective of meeting health needs for future. You current capping on room rent might be quite effective for you considering the existing cost of Medicare but what will happen in case of future situation where every year the cost of medical services is different than what it is today as it is increasing at the rate of 7.5% every year.
  2.  Look for policies generally with no limits on the room rent so that you have freedom to get the best facilities within your pocket.
  3. Always advised to have policies with no capping on room rent but even if a restriction is there it should on the type of room you are eligible of.

If you technically able to understand the mathematics explained above go and check your existing policy and if the similar problem exist check for options to port to new insurance provider

Articles