 "Health Insurance 1")
When it comes to terms and conditions, policyholders are least aware of the availability of unlimited coverage, consumables cover, and room rent capping, according to the ACKO Health Insurance Index, which deep dives into the health insurance buying behaviour of individuals as well as their expectations from an insurance policy.
Let's understand these in detail:
Understanding the nuances of health insurance terms and conditions is crucial to ensure that the policyholders make the most of the policy when needed. To make informed decisions about health insurance, it is critical to take time to carefully review and research before buying and consider how these conditions may affect the coverage and financial responsibilities in different healthcare scenarios. Being well-informed about these lesser-known terms and conditions can empower one to choose the right policy and make the most of the health insurance coverage.
When it comes to health insurance, consumers mostly get swayed by the hero features of a product and its price. Some of the features and terms & conditions which have a greater impact on the payout from the insurer to a consumer often get missed. Some terms & conditions which are critical are:
1 Consumable cover: Most health insurance products in the market do not cover certain consumable elements like gloves, syringes, PPE kits, and even attendant charges. These components generally form 10-15% of the hospital bill.
"Some insurance companies have launched consumable coverage with a list of 40-60 items being covered. One should be covered for 100% of hospital bill if they are paying 100% of their premium," said Rupinderjit Singh, Vice President - Retail Health at ACKO.
Consumables Cover in health insurance refers to the financial coverage for all the medical equipment/aids classified as 'consumable', usually the single-use equipment like protective gear, masks, gloves etc. One of these is the Consumables Cover which is now offered as an add-on by many insurance companies.
More From This Section
Here is the list of most preferred consumable items in health insurance plans, according to Digit Insurance
1. Administrative Charges: All expenses incurred due to paperwork and documentation, admission kit, visitors' pass, discharge process, maintenance of medical records and other documentation expenses come under the administrative charges.
2. House Keeping: Daily use items such as mineral water, toothbrush, soaps, sanitary pads, slippers, combs, shampoo, diapers etc.
3. Room Expenses: The expenses incurred due to the facilities provided in the room, such as AC, television, telephone, attendant charges, luxury tax etc.
4. Surgical Equipment: Cotton, Razor, Needles, Syringes, Surgical tape and other surgical disposables used as a part of the treatment procedure.
5. Any other item provided in the product.
But there is a catch!
The list of consumables as prescribed by IRDA is a long one but it generally serves just as a guideline and the insurers have the liberty to include/exclude any item in their policy.
2. Room rent capping: One should be aware of the room eligibility while buying health insurance. Traditionally, most insurance products provide for either a shared room or a single private room for treatments. With increased income levels, many consumers now desire an executive/suite room for treatments. Modern times require coverage for both single private rooms and the upgraded room for treatments. However, not only is the rent different for the premium rooms, but the associated costs of treatment are different too, such as doctor fee, surgery/procedure cost, consumable cost, etc. For example, an appendix surgery at a tier I hospital with a single private room may cost Rs 1.5 lakh but in a suite room, the cost would approximately be Rs 3 lakh.
Consider Mr John has bought a health insurance policy of Rs 5 lakh that has a room rent cap of 1% of the sum insured. After a few years of buying the policy, he had to be hospitalized for Hip Replacement Surgery. His hospital stay was going to be 5-days long, and now he had to choose a room.
His insurance policy allowed him a room that cost Rs. 5,000 per day, however, he chose to stay at one that was worth Rs 8,000 per day. He thought the insurance company will bear Rs 5,000 per day, and he will bear the difference of Rs. 3,000 per day for 5 days. However, the concept of Room Rent does not work as Mr John calculated. It works on the principle of proportionate deductions. It is calculated as the percentage of room rent allowed upon actual room rent.
Proportionate Deductions = Room Rent Allowed / Actual Room Rent * 100.
"Room rent capping is the limit of hospital room cost that is borne by our insurance provider. This capping can either be a whole figure that states how much room rent expenses are paid by the insurer or as a specific percentage of the sum assured. Before a hospitalization, you should check the room rent capping. For example, if the capping on room rent set by the insurer is Rs 5000, then year on year can claim only Rs 5000 as room expenses," said Policybazaar.
Nowadays a lot of health plans come with no room rent cap and you can avail of the treatment with ease. One of the major benefits of no room rent capping in your health insurance is that your room rent choice doesn’t get limited. Policyholders also have the option of a Room Rent Waiver add-on, which can be bought with an insurance policy that has room rent capping. But the limit will be waived off under this add-on.
3 Unlimited coverage: This is for individuals who are looking to buy a medical cover with no limits on the sum insured. It implies you can get coverage for expensive medical treatment without worrying about exhausting the sum insured
Year on year the cost of treatment is witnessing a spike. " Five years ago, the prevalent coverage amount for users was Rs 5 lakh. At present, most users are opting for Rs 10-25 lakh of coverage within the industry but with healthcare inflation in India at~14-15%, a larger coverage amount like Rs 1 crore or Unlimited coverage makes more sense when customers are planning for the next 30-40 years of their life. Unlimited coverage basically means, that whatever may be the cost of treatment, one would be covered irrespective," said Singh.
Year on year the cost of treatment is witnessing a spike. " Five years ago, the prevalent coverage amount for users was Rs 5 lakh. At present, most users are opting for Rs 10-25 lakh of coverage within the industry but with healthcare inflation in India at~14-15%, a larger coverage amount like Rs 1 crore or Unlimited coverage makes more sense when customers are planning for the next 30-40 years of their life. Unlimited coverage basically means, that whatever may be the cost of treatment, one would be covered irrespective," said Singh.
