The ₹20,000 Room That Cost ₹1 Lakh
One small line in your health policy. Most people see it only at the hospital counter.
Your friend calls you. He says, “Aaj meri treat. ₹500 per plate tak order karo.” (Today’s my treat. Order up to ₹500 a plate.)
You go to the hotel. The ₹500 thali is ok. But the ₹1,000 special thali looks very good. You think, extra ₹500 I will give from my side. No problem.
Bill comes. Friend sees the bill and says, “You took double thali. So now I will pay half only. Half thali, half cold drink, half sweet. Everything half.”
You will feel bad. You only wanted to pay extra for the thali, na?
Many people don’t know this.
Room rent limit
In most health policies there is a limit for the hospital room. Mostly it is 1% of the policy amount per day.
So if your policy is ₹5 lakh, you can take a room up to ₹5,000 per day.
Now suppose you take a ₹10,000 room. Company will not say, “pay extra ₹5,000 and done.” Your room is double, so company will pay half. Not only half of the room. Half of doctor charges, half of surgeon charges, half of nursing, half of operation theatre also.
In insurance language this is called proportionate deduction. Big word. Simple meaning: bigger room, everything gets cut.
See this example
Vinay and Prakash stay in the same building in Nashik. Both have a ₹5 lakh policy. Room limit for both is ₹5,000 per day. Both had the same knee operation in the same hospital. Both stayed 4 days.
Vinay took the ₹5,000 room.
Prakash took the ₹10,000 room. He thought, 4 days only, extra ₹20,000 I will pay.
| Vinay (₹5,000 room) | Prakash (₹10,000 room) | |
|---|---|---|
| Room, 4 days | ₹20,000 | ₹40,000 |
| Doctor, surgeon, nursing, OT | ₹1,60,000 | ₹1,60,000 |
| Medicines, knee implant, tests | ₹1,00,000 | ₹1,00,000 |
| Total bill | ₹2,80,000 | ₹3,00,000 |
| Company paid | ₹2,80,000 | ₹2,00,000 |
| Paid from pocket | ₹0 | ₹1,00,000 |
For Prakash, company paid half the room. ₹20,000 out of ₹40,000. And half of doctor, surgeon, nursing and OT. ₹80,000 out of ₹1,60,000.
Room was only ₹20,000 extra. But Prakash paid ₹1 lakh from his pocket.
And see, his policy was ₹5 lakh. Bill was ₹3 lakh only. Still he paid one lakh.
(Actually Vinay’s doctor and OT charges also would be a little less, because many hospitals charge more for the same doctor in a bigger room. We kept it same so the example is easy.)
Why company does this
Because hospital does it first. In many hospitals, the same doctor and same operation costs more if you are in a bigger room. So company says, you took a double room, so all room-linked charges we will share the same way.
There is some logic. Problem is, most people come to know at discharge time only.
What company cannot cut
The insurance regulator, IRDAI, has said some things cannot be cut like this:
- Medicines and things from the medical store
- Implants, like knee implant or stent
- Tests
- ICU charges
That is why Prakash’s ₹1 lakh for medicines, implant and tests was paid full.
One more thing. If the hospital has the same rate for all rooms, then this cut should not happen.
What you should do
Do this today only, when nobody is in hospital. In the hospital nobody has time to read a policy.
Three checks
1. Open your policy. Find the room rent limit. Write it down in rupees.
2. Check if your policy has no room limit at all. Many new policies don’t have it. If yours has a limit, ask about it at renewal time.
3. At admission time, tell the hospital which room fits your limit.
If someone at home is getting admitted suddenly, call us first before taking the room. We will check your policy and tell you.
Want the full rule with all the numbers in one place? See our simple guide: Room rent limit, explained.
Not sure what your policy says about room rent?
Speak to the Moneyplus team. We will read your policy with you and tell you your room limit in rupees, before you ever need it.
Moneyplus Editorial
Vinay and Prakash are an illustration, not real people, and the figures are an example to explain the rule. Room rent limits, ICU limits and deductions differ for every insurer and policy, so please read your own policy wording.
Moneyplus is an AMFI-registered mutual fund distributor — ARN-137949. What you read here is general information written from experience, not a recommendation to buy or sell any scheme, and it does not take your personal situation into account. As a distributor, Moneyplus earns commission on the schemes it transacts for its clients. Mutual fund investments are subject to market risks; read all scheme related documents carefully. Past performance does not guarantee future returns. Insurance is the subject matter of solicitation.
