Health Insurance: Keep an eye on sub-limits in your policy

As people go about buying health insurance policies to ensure financial protection in case of a medical emergency due to Covid-19, they should look at the various sub-limits mentioned in the policy as these can curtail the coverage. While opting for a policy with sub-limits will lower the premium to be paid, it will lead to a lower claims payout and increase the out-of-pocket expenses of the policyholder.

Health insurance companies put a sub-limit on policies which is usually a percentage of the sum insured or a fixed amount. The sub-limits are mentioned in terms and conditions of the policy document. In policies with sub-limits, the company will not pay the full amount claimed and a part of the medical expenses will have to be paid by the policyholder.

There are various types of sub-limits such as room charges, treatment of certain diseases, post hospitalisation, etc., and are applicable to both cashless and reimbursement claims. It is better to get admitted for a treatment in a network hospital listed by the insurance company as the rate structure is fixed mutually by hospitals and the insurance companies.

Sub-limit on room rent
This is the most common form of sub-limit in an insurance policy. Usually, insurers put a cap of 1% and 2% of the sum insured for room rent and ICU charges, respectively. If the room rent opted by the insured exceeds the rent covered in the policy, then the policyholder will have to pay the additional room rent from his own pocket. As various hospital expenses are linked with the type of room one chooses and as per the sub-limit on room rent, there will be a cap on allied services such as physicians’ consultation fees, anaesthetists’ charges, diagnostic tests, etc. Ideally, the insured person must opt for a room that gets fully covered under the insurance policy even with sub-limits.

Sub-limit on treatment
Most insurers have sub-limits for pre-planned medical procedures such as cataract removal, knee ligament reconstruction, kidney stones removal, tonsils, sinus which is a fixed amount based on the geographical locations. The list of ailments and cap in treatment costs will vary from one insurer to the other. The sub-limit on treatment is not linked with the sum assured, which means even if a policyholder has a high sum assured, he will not be able to claim the entire treatment expenses due to the sub-limit clause in the policy. Policyholders must take note of the sub-limits before going for a pre-planned medical procedure and inform the company or the third-party administrator before getting admitted for the pre-planned medical procedures. However, there are no sub-limits for treatment on emergency basis such as Covid-19 or coronary artery bypass graft.

Sub-limit on post-hospitalisation
In many cases policyholders after the treatment may have to stay at home for some time under medical supervision. Many insurers pay for post-hospitalisation expenses with sub-limits where the policyholders will have to pay a part of the expenses from his pocket as per the terms and conditions of the policy.

Health insurance policies with no sub-limits will have a higher premium as compared to a policy with sub-limits in various categories. If a policyholder has a cover with sub-limit, then he or his family members must ensure that the medical expenses do not cross the threshold limit.

So, before you buy a new health insurance policy or renew your existing one, make sure you opt for a cover which has no sub-limits or else you will be left with limited coverage, especially at a time when the Covid-19 pandemic is raging across the country.