Your room rent is the basic unit that decides your overall hospital bill, the lesser your room rent, the lesser your overall hospital bill. In this piece, let us demystify room rent and ICU limits for cheaper group health insurance policies.
Group health insurance is a type of health insurance in which health coverage would be offered to a group of members under a single policy. Room rent in group health insurance is the per-day room charges or bed charges the hospital charges the insured patient in case of hospitalization.
ICU expenses are the emergency medical expenses that are incurred by the insured patient for treatment in the ICU room which would be different from the room rent. Patients are generally shifted to the ICU after they have been operated on. The ICU is manned 24/7 and patients are kept in a controlled environment. Only once patients vitals get stable are they shifted to their room or ward.
Group Health insurance policies generally cap room rent limits and the ICU limits as a percentage of the sum insured. The room rent limit is generally capped between 1-2% of the sum insured, while the ICU charges are capped between 2-4% of the sum insured. Your policy might also have a general overall capping to ensure that the Insurer does not end up paying excessive amounts.
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Room rent & ICU limits in health insurance policies
Room rent/ ICU sub-limit
The “room rent sub-limit” is the limit on the room the insured customer can opt for in case of hospitalization. The sub-limit is very important as it would decide the claim payout after the hospitalization. Same goes for the ICU limits.
Industry experts advise customers to choose their room rent and ICU limits very carefully at the time of purchasing the group health insurance plan as selecting a higher room category would reflect negatively on the overall claim amount to be paid.
The final claim amount would be deducted in the same proportion which the customer would exceed while taking the room at the time of hospitalization.
For example: if a customer has taken a group health insurance policy with a sum insured of ₹ 10 Lakhs and the room rent limit is ₹ 2000 per day, and in case of hospitalization, has taken a room with ₹ 4000 rent, then the total claim to be paid would be reduced in proportion of the room selected. In this case the bill amount that gets approved might be half of the total amount.
While the listed example oversimplifies the billing procedure, the fact that all of your bill are charged based on the room you opt for, remains a fact. Hence, it is very important to make sure that you stick to your room rent limit mentioned in the group health insurance plan.
No room rent/ ICU limit plans
There are certain group health insurance plans in the market that offer no room rent limit and no ICU limits which can be considered by the customer at the time of purchasing the health insurance policy.
Even though the premium would be slightly higher for these kinds of plans, it is advisable to go for these plans as there would be no hassle even if a higher rent room is chosen for hospitalization. This would ensure that you do not constantly need to educate your employees on selecting the appropriate room category. Most of their hospital expenses would also get settled.
Selecting the appropriate category room during hospitalization would ensure that there are no deductions done by the insurance company.
Why is Room Rent Important in a Group Health Insurance policy?
For hospitals, the room rent forms the basic unit for billing. This means that all the other expenses during hospitalization are linked to the room rent.
For example: For a room that costs ₹ 2000 per day, the doctor’s consultation would be ₹ 1000, whereas for a room that costs ₹ 4000 per day, the doctor’s consultation would be ₹ 2000-3000 and this is where the insurance company deducts the overall claim payable to the insured as the insured is spending more than the agreed limit.
You could think of it as the service provided by the hotels for different category rooms, rooms with higher costs would have luxury service whereas rooms with lower costs would have normal service.
The room rent limit is very important as it reduces the premium to be paid by the insured and at the same time decides the final claim amount.
Room rent without sub-limits is where the insured is free to choose any room for treatment. Room rent with copayments is where the insurance company offers the room on a co-payment basis. If the customer chooses a room above the limit, the extra room rent charges have to be paid by the insured.
Certain companies offer group health insurance plans without any sub-limits as an add-on cover which means that the customer can choose any room by paying an extra premium at the time of purchasing the group health insurance policy.
Frequently Asked Question (FAQs)
- What are room rent limits in group health insurance?
Room rent limits cap the daily amount reimbursed for hospital room charges, often as a fixed sum or a percentage of the sum insured.
- How do ICU limits differ from room rent limits?
ICU limits cover higher daily expenses for intensive care units, usually at a higher fixed amount or percentage compared to room rent limits.
- What happens if I exceed the room rent limit?
Exceeding the limit can lead to proportionate deductions on the entire hospital bill, including associated charges like doctor fees.
- Can I get a policy without room rent limits?
Yes, some insurers offer plans with no room rent capping or higher limits to ensure comprehensive coverage.
- How can employers manage room rent limits effectively?
Employers can negotiate policies with higher room rent limits, educate employees, and promote network hospital usage to minimize financial risks.
