The Covid-19 pandemic has made many of us realise the importance of health insurance to secure our families from financial hazards. No doubt, the penetration of health insurance has been rapidly growing in recent times but only a few policyholders are aware of claim settlement processes and related issues. Many policyholders are under the impression that they are eligible for a complete claim amount. But, in reality, the insurer may not settle the entire claim amount. For the benefit of the unversed, ETV Bharat explains six reasons why your insurer may not settle the complete claim amount.
1. Copay
Copay is a cost sharing provision where a percentage of the claim must be borne by the customer. For instance, if you have a 20% copay in your policy, and you make a claim for Rs 50,000, you will have to bear Rs 10,000 and the insurer would pay Rs 40,000. In some policies, the choice of room, the city of treatment, etc would trigger the quantum of copay, hence understanding these provisions is important before purchasing a policy.
2. Room rent restrictions
The most common mistake customers make is not paying attention to the restrictions on room rent and room category in the policies. Depending on the sum insured and the hospital you choose, the out of pocket expenses will vary. Generally, insurers limit the room rent to 1 or 2% of the sum insured you choose, though this limit cannot be applied in case of admissions in the ICU as per the regulations of the Insurance Regulatory and Development Authority (IRDAI).
So, if you have a policy of Rs 3 lakh, you are eligible for a room rent of Rs 3,000 (assuming a 1% limit) and if you get admitted in a room with a daily room rent of 5,000, you would end up paying Rs 2,000 from your pocket towards room rent alone. Hence, it is not advisable to buy a plan with a very small limit on room rent.
3. Geography-based restrictions
Some policies have geography-based pricing with customers in metros paying a higher premium than those living in smaller cities and towns. If a customer buys a policy in a small town and seeks treatment in a metro, there would be a copay. This is not an issue for general illnesses like fever, diarrhoea, etc where treatment can be taken in a small town.
But in case of major illnesses customers are likely to travel to major cities due to the availability of treatment and would pose a double whammy. The treatment costs are likely to be high and a copay in these critical cases would burden the customer.
4. Policy sub-limits
Your policy could have sub-limits for specific benefits much lower than the sum insured you have. So, check for these sub-limits for specific benefits, say a Rs 50,000 limit for AYUSH treatments. In some policies pre and post hospitalization expenses are capped at 10% of the total claim.
5. Procedure sub-limits
In some cases, policies have specific limits for common surgical treatments like cataract, hernia, etc. So, if your bill is more than the procedure limit, you would have to bear the difference in expenses.
6. Consumables
In an average hospital bill, 3-6% of the charges are for consumables such as gloves, dressing, cotton, disposables, etc. In the current COVID scenario, these charges have burgeoned to 15-20% of the bill due to the heavy use of protective gear such as PPE kits, masks, gloves, shields, etc. If a policy does not cover these, the customer will have to bear the cost from his/her pocket.
Conclusion
The best way to buy health insurance is to first choose an insurer with a proven track record of stable claims practices. Then go through the fine print of the products that are suited to your needs. Also, check the policy wordings, ask the insurer about sub-limits, co-pay and restrictions, and compare different policies available in the market. Little attention to detail will go a long way in having a worry-free claim settlement.
