So you have decided to go for a health insurance policy? That’s a great decision! But have you thoroughly assessed your health insurance needs before choosing a plan? It is important to understand the nitty-gritties of your health insurance plan even if you go for a large health cover. Many insurers operate on the model of sub-limits. What are sub-limits? Sub-limits are upper limits imposed on various aspects of hospitalization. Therefore, all costs lower than your sum assured may not be approved by your insurance company. Thus, resulting in unexpected outgo from your pocket. Sub-limits are imposed to limit claims outgo and is restricted to some common ailments such as piles, hernia, cataract, kidney stones, etc. Of course, the list of ailments and sub-limit factors vary from insurer to insurer. While sub-limits are not largely prevalent for individual health insurance plans, group insurance policies have such limits.
Sub-limits exist for many aspects such as room rent, ambulance charges, ICU expenses, oxygen, etc. Typically, room rent expenses as part of sub-limits are restricted to 1 – 1.5% of the sum assured per day. ICU charges are capped at 2 – 2.5% of the sum assured. Let’s look at some of these hospitalization costs and how insurers treat these in further detail:
Sub-limits on room rent:
Many health insurers cap the room rent per day to not exceed 1 – 1.5% of the sum assured i.e., if your sum assured is Rs.5 lakhs, the room rent cannot exceed Rs.7,500 on the higher side.
Sub-limits on specific ailments:
There are certain ailments which come under the sub-limits clause. Hence, you will need to check the list of ailments which come under the sub-limits clause of your insurance provider. While your sum assured could be high, you might still not get adequate insurance if the ailment for which you or a member of your family is undergoing treatment falls under the list of ailments that are restricted by sub-limit. For instance, if there is a sub-limit clause of 40% of sum assured for liver or kidney ailments, then regardless of whether your total sum assured is Rs.5 Lakh, you will be eligible for only Rs.2 Lakh due to the 40% sub-limit clause.
Miscellaneous Expenses: Depending on your insurer, treatment costs such as ambulance charges, oxygen, etc. also fall under the sub-limit clause. While some of these costs might be small, if you have not done your homework adequately, these charges might add up to cost a considerable outgo from your pocket. Therefore, it is advisable to do a thorough review of what aspects of hospitalization fall under sub-limits, if any, for your health insurance policy
Factors to keep in mind:
a. While the premium for policies with sub-limits could be slightly lower than policies that don’t have sub-limits, the risks are rather higher. Therefore, weigh the opportunity costs before choosing the plan.
b. Assess the cost of hospitalization from time-to-time and evaluate whether your current insurance cover meets the escalating cost of medical treatment. If required, increase your insurance cover to meet the higher cost of medical treatment.
c. It is advisable to take a health cover fairly early in life. This ensures your premium amount is lower and you stand protected against medical expenses as well.
d. A higher coverage ensures your eligibility is higher in spite of a sub-limit.
e. Identify a few hospitals in your neighbourhood, to be adequately prepared for emergencies. Also, ensure that the hospitals identified are part of the network hospitals list of your insurance provider.
To ensure you are not in for any nasty surprise at the time of hospitalization or claim, make sure you go over your health insurance policy document carefully to understand the terms and clauses specified. If the policy contains sub-limit clauses, evaluate if there are other plan options that contain no such restrictions and at similar price-points. Compare health insurance plans for sub-limits before going for your purchase.