All about room rent limit in health insurance

When buying a health insurance policy, apart from the coverage amount, there are other aspects too which one must consider. One of such important aspects to check on when buying health insurance is the room rent limit. After staying at a hospital for treatment, a bill is generated which mentions the treatment, service and other associated expenses. One such expense is that of room rent which can increase your out-of-pocket expense despite having a health insurance policy. Read on to know all about the room rent limit in health insurance. 

 What is room rent in health insurance? 

When an individual gets hospitalized, he/she must pay per day room charges to occupy a hospital bed in that hospital. Room rent is charged to the patient based on the type of hospital room occupied. For instance, room rent for a single AC room would be high compared to a double occupancy room. Similarly, room rent in private hospitals is usually higher than government hospitals. 

With a health insurance policy, room rent is settled directly by the insurance company. However, every health insurance company comes with a capping on the room rent i.e. the limit up to which the insurance company will provide coverage for. 

What is room rent limit? 

As the name suggests, room rent limit is the capping imposed on the coverage of a room occupied by a patient in the hospital. The limit can be expressed either in the form of a fixed percentage or an absolute amount. 

Room rent limit is the maximum coverage offered by the insurance company in case the individual gets hospitalized. Any limit above the mentioned room rent has to be paid by the policyholder. For instance, in case the room rent limit mentioned in a policy is Rs. 5,000 and if the policyholder occupies a room that has a rent of Rs. 10,000 then in this case, the additional Rs. 5000 on a per day basis and all the associated costs will have to be borne by the policyholder. 

Types of room rent in health insurance 

 When it comes to room rent and capping, every insurance company has a different set of rules. When buying a health insurance policy, it is imperative to check on the type of room rent capping as it can increase your out-of-pocket expense at the time of claim. 

Room rent with no capping: This refers to the policies that come with no limit on room rent and the insured can occupy a room of his choice 

Co-payment on room rent: Co-payment refers to sharing of the room cost which means anything above the mentioned rent amount has to be paid by you. This helps in reducing premium as the cost of the room is shared between you and the insurance company.  

Room rent with capping: This refers to the cap on room rent limit beyond which the insurance company is not liable to pay for the expenses and all the related expenses will have to be borne by you 

Room rent cap on specific types of room: This refers to capping on specific room types i.e. if the policy mentions double occupancy room and the insured stays in a single AC room then the charges of the single AC room over and above the limit mentioned have to be paid by the insured. In this case, the insured has the choice to either double occupancy room or the room of a below category. 

 How does room rent have an impact on your health insurance claim? 

 At the time of claim, the insurance company will consider the room rent mentioned and based on that you will have to pay for the additional expenses if required. The claim amount will increase or decrease based on the room you occupy and the additional associated expenses.  

For instance, consider the example below 

Mr. John’s health insurance policy has a Rs. 5 lakh health coverage with a room rent limit of Rs. 5,000. In this case, Mr. John had to get hospitalized for an angioplasty due to a heart attack. In this case, if Mr. John decides to stay in a room with rent of more than Rs. 5000 then he will have to bear the additional expenses along with the associated expenses of the room. 

 In this case, if John stays in a shared room with a room rent limit of Rs. 5000 then he will not have to pay for any expense out of his pocket, however, if he stays in private deluxe with a rent of Rs. 8500 then he will have to pay Rs. 40,000 out of his pocket as all costs of doctor fees, surgery fees, medicines, etc. will vary depending on the type of room occupied. 

 Solution to room rent/ What you should do in case of room rent capping 

Choose a room with the capping: In case if you choose a room within the specified limit mentioned in the policy, then you don’t have to pay for the medical expenses out of your pocket. You will be able to avail the treatment at the room without having to worry about spending out of pocket. Otherwise, this could significantly impact the claim amount. 

Opt for a policy with no room rent limit: Health insurance policies with no room rent limit will help you avail the treatment at the room of your choice without having to pay any additional amount. 

Port the policy: If you have any existing health insurance plan and feel that the room rent limit mentioned is not sufficient then it is best to port the policy. Porting the health policy will help you retain the existing policy benefits.