Your health insurance may not fully cover claims: Here’s why

When you regularly pay your health insurance premiums and claim a cashless settlement or reimbursement during and when you receive treatment, you expect to receive the full amount you spend on your hospitalization bills.

However, this may not be the case as insurers clear only a portion of the claims you file by stating a few key clauses in your health insurance policy.

It is important for you, as the insured, to know these key parts of your policy so that you are prepared to shell out a portion of the medical bill and not be caught unawares at the time of medical bill settlement. The amounts can sometimes be quite substantial, especially in the case of senior citizens.

Here’s more on these key policy clauses.

Paying out of pocket

Some policies, especially those involving senior citizens, may have a co-payment clause. So you have to pay part of the bill for certain medical treatments. The percentage is usually determined in the terms and conditions section of the insurance policy and communicated to the insured. Some insurance policies require a co-payment of 10-20%. So if you bill the hospital for 1 lakh, the insurance company will settle 90,000 (less consumables used) and you will have to pay the balance 10,000 from your savings if the co-payment is 10 percent.

Group insurance provided by employers also has co-payment clauses occasionally for certain illnesses and in case of senior citizens.

Then, disposable syringes, needles, cotton, gauze swabs, catheters, PPE kits, gloves, masks, disinfectants, and so on are generally not covered by regular insurance policies. Before the pandemic, consumables accounted for about 5 percent of the total medical bill. But, later, that percentage rose to the level of 20 percent and there were cases where such costs reached 30-40 percent of hospitalization costs. Administrative, housekeeping and room services are also not covered by most policies.

HDFC Ergo, Tata AIG, Care Health and Niva Bupa offer additional consumable covers or riders to take care of such expenses, in lieu of slightly higher premiums.

Settlement capacity

Some insurance companies link the settlement amount with the room rent amount sanctioned in their health insurance. Many health insurers have restrictions on hospital room rentals that policyholders can use. The rate can be an absolute figure, say 5,000 or 10,000 per day, or a percentage of the sum assured, usually 1 percent. While the health cover of most private insurance companies, especially the newly introduced ones, do not have room rental limits, some legacy public sector insurers such as United India Insurance and New India Assurance have such ceilings.

So, the maximum limit you can use to rent a room is 5,000 per day. If you are admitted to a hospital that charges a higher amount for a room, say 15,000 per day, you may have to pay the remaining amount out of pocket. Also, all bills are related to room rent. If instead of the 5,000 you are allowed, you choose to be admitted to a hospital that charges 10,000 or 100 percent more, your total allowable bill would also be lower. In the above case, the insurer will only pay you half of your total medical bill.

When taking out a health insurance policy, you must ensure that there is no limit on the daily rent of the room.

One key aspect that you must consider is that you must have a list of in-network hospitals handy so that you can get into the right hospitals even during emergencies.

You must be careful to avoid blacklisted hospitals, the list of which would be available on your insurer’s website or app. If you choose to be admitted to such hospitals, your entire claim may be rejected.

Some procedures do not require 24-hour hospitalization, such as day care surgeries. Then there are sub-limits for payouts for specific treatments.

Thus, cataract removal, middle ear surgery, dialysis, sinus surgery, knee replacement, hernia removal, and the like usually have an upper limit on the sanctioned amount, regardless of actual costs. For example, some insurers allow only 25,000-30,000 per eye for cataract removal. You would have to bear any higher amount charged.

It is good to have comprehensive health insurance with relevant drivers. But you must always have a medical corpus (as part of your overall emergency fund) that is sufficient to cover what is not settled by the health insurance company.

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