Understanding Room Rent Limits In Health Insurance

How much difference do you think there exists between these two policies?

Policy 1:
Sum-insured: 3 Lakhs
Room-rent limit: INR 3,000 for normal room and INR 6,000 for ICU room

Policy 2:
Sum-insured: 3 Lakhs
Room-rent limit: No room-rent limits

The answer is A LOT. The difference can be whether 50% of your medical bill is paid or 100%!

Let’s understand why.

All medical expenses in a hospital are linked to room rates. (Similar to how your food bill increases when you go to the AC section of a restaurant ‍♂️)

Now let's assume you have Policy 1, which a sum-insured of 3L and room-rent limit of 3k

At the hospital, the charges could be as follows

Room rent: 3k per day, Total medical bill: 1.5L
Room rent: 6k per day, Total medical bill: 3L

Now, if you opt for the 6k room (twice your room-rent limit) , only 1.5 L would be covered under insurance.

This is because 3k/6k = 50% and 50%* 3L (actual medical bill) = 1.5 L (what insurance will cover)

The remaining 1.5L would be payable out-of-pocket when you opt for the higher room category, even though the sum-insured is 3L.

Read your company's health policy today to understand what the room rent limits are!  If it's low speak to your HR about it since they will be deciding on your team's financial wellbeing.