Proportionate Deduction
Many regular health insurance plans include a daily room rent limit. Your insurer fully covers the claim only if you pick a room within this limit during your hospital stay. In case you choose a higher category room, your insurer deducts proportionate charges for all associated medical expenses. This is called proportionate deduction on associated medical expenses in health insurance parlance.
Proportionate deduction results in significant out-of-pocket expenses despite having a health cover. For example, you have a policy with a daily room rent limit of Rs. 5000/day. During hospitalisation, you pick a room that costs Rs. 8000/day. If you are hospitalised for 3 days, you would assume that you have to pay the remaining Rs. 3000 for each day out-of-pocket, i.e., a total of Rs. 9000. Unfortunately, that is not the case. You will typically be asked to pay for a proportionate deduction on all associated medical expenses, such as doctor’s fee, surgery cost, nursing charges and others, leading to a significant financial burden.
If you want to avoid this burden, choose a policy that does not include any room rent restrictions. But, such plans are more expensive. If you are on a budget and get a health insurance policy with a daily room rent restriction, make sure you stay in the room you are eligible for during hospitalisation.
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A
- Accident
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B
C
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D
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E
F
G
H
I
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L
M
N
O
P
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R
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S
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