Health Insurance with No Room Rent Capping

Yes, a majority of leading health insurance providers cover room rent in their health insurance policies. Room rent is the amount hospitals charge for the type of hospital room you have opted for. General rooms with multiple occupancies are cheaper than 2-person or 1-person private rooms.

The room rent that will be covered is listed in your health insurance policy. If you prefer private rooms, it is advisable to opt for health insurance without room rent capping.

What is meant by no capping? What does no capping on room rent mean? Let us find out.

Looking at capping meaning in insurance, it means any limitations or caps put on coverage. Room rent capping in health insurance implies the limitation put on the room charges under the health policy coverage. If you decide to stay in a private room of a higher value than the insurance coverage amount, you will have to bear the difference in costs from your own pocket.

The room rent cap can either be an exact amount or a percentage of the sum assured. Also, the amount can either be capped per hospitalisation day or as a total amount for the entire hospitalisation.

Can you get a health insurance policy with no capping on room rent? Yes, you can

No capping on room rent means that the health insurance provider applies no limitations on the coverage provided for room rent charges, as long as it is within the predetermined sum assured.

Room rent with no capping in health insurance allows you to claim the entire expenses incurred on room rent, especially if you have been admitted to a private room or ICU, which generally has higher charges. No capping on room rent also lets you avoid paying the higher charges on incidentals and medicines when admitted to a premium or deluxe private room.

The hospital room rent coverage is of four types:

• Health insurance with no capping on room rent : Most desired feature in a health insurance policy, no capping in health insurance allows you to get your choice of the room without worrying about the room charges.

• Health insurance with a sub-limit and co-payment of room rent : This includes a capping on the room rent amount, with a co-payment clause. That means the health insurance company will pay only the amount covered under the policy. You, as the policyholder, will have to co-pay the rest of the amount.

• Health insurance with coverage for specific room types: Here, the health insurance policy will specify the particular hospital room types that are covered under the policy. If you opt for a non-covered room, you will have to bear the entire room rent charges yourself.

• Health insurance with riders for no capping on room rent: Some health insurance policies have a cap on the room rent charges. However, you can buy an optional rider that allows no capping on room rent by paying an additional premium.

There are several benefits of no capping on room rent:

• Choice of hospital rooms : When you get a health policy with no capping on room rent, you can choose to stay in a room of your choice - twin-sharing, private or even deluxe private room - based on your total sum assured.

• Quality treatment and comfortable stay : When you book a private room, you get dedicated attention and better amenities. Also, you can have a family member stay with you (if allowed). You get a private TV, a dedicated bathroom and many such benefits. Thus, you can enjoy a comfortable stay and focus on your recuperation if you have a health insurance plan with no room rent cap.

• Choice of quality of treatment: No matter the type of room you stay in - a private room or a general shared ward - your health insurance claim is based on the total expenses comprising the hospitalisation charges and treatment costs. When you have a health insurance plan with no room rent cap, you can choose to either use the policy to pay for the entire treatment or divide the expenses, subject to your actual sum assured.

The following table lays down the difference between claiming a health insurance policy that has limits on room rent and one that has no capping on room rent. For ease of calculation and understanding, we have only taken the room rent charges and no other hospitalisation and treatment costs:

Thus, considering just the room rent, you save a considerable amount if you opt for a health insurance plan with no room rent capping.

However, note that this is a simplified calculation solely for the purpose of understanding. In reality, room rent deductions work on the proportionate deductions principle. That means, it is a percentage of room rent permitted under the policy upon the actual room rent.

Applying the proportionate deduction principle in the above example:

Room Rent Allowed / Actual Room Rent x 100 = ₹12,000/₹20,000 x 100 = 60%.

Now, all the other expenses listed in the final hospital bill will be applied to this percentage. In case you have a health insurance policy with room rent capping, the insurer will only pay 60% of the total bill (except for non-associated expenses like medicines which are at MRP).

Thus, capping on room rent not just affects the amount of coverage for the room rent, it also impacts the claim amount disbursed for the total hospitalisation bill.

It is imperative to compare health insurance policies and read the policy documents to check for the policy inclusions and coverage limitations. For instance, some policies may offer inbuilt critical illness insurance or room rent capping while others may have it as an optional rider. We saw room rent capping affects your overall claim amount. Therefore, check for the room rent coverage and any limitations before buying a health insurance policy.

If you are looking for a health insurance policy with no capping on room rent, check out the Medicare range of plans by Tata AIG. Along with no room rent capping, we also offer Covid-19 insurance, lifetime renewability, automatic restoration benefits, daycare and domiciliary treatment cover, consumables benefit and much more.