Health Insurance Sub-Limits

Sub-limits in health insurance are restrictions placed by the insurance company on the maximum amount they will pay for specific expenses that are part of the total hospital bill. The balance has to be paid by the insured person. These expenses could include ambulance services, surgery fees, room rent, and consumables, such as gowns and gloves. The insurers’ purpose is to prevent excessive spending by capping the reimbursement amount for certain expenses. Sub-limits may also help you cut down on the premiums as the claim liability of the insurer comes down. Let’s learn about its other aspects.

Types of Sub-limits

• Usually, in most policies, the room rent comes under the sub-limits the clause and you should be most careful about these. That’s because, usually, hospital bills are calculated as per the room rent.

• Sub-limits can vary significantly from one policy to another, even within the same insurance company. Some policies may have sub-limits on specific treatments like maternity or psychiatric care. So, compare different policies to find one that can aligns well with your healthcare requirements.

• Some policies may include sub-limits for certain illnesses, such as cancer or heart disease. These limits could cap the amount reimbursed for treatments, even if the overall sum insured is higher.

How It Works

• The expenses that are over and above the sub-limit will have to be borne by the policyholder.

• Let us take an example. If you have a cover of Rs 5 lakh and a room rent cap of 1 per cent of the sum insured, the insurer will only pay up to Rs 5,000 for the room rent. You will have to bear the cost beyond Rs 5,000.

• However, there is a further catch, especially if there is a sub-limit on the room rent. If the room rent is more than the sub-limit, your overall cost may increase.

• If room rent exceeds the sub-limit, the insurer may require the insured person to pay a percentage of the approved amount as part of the co-payment obligation.

What You Should Do

• Review health insurance policy to understand its sub-limits.

• Ask the insurance company for detailed explanations of sub-limits and request examples of how they might affect claims. It’s important to keep a record of these explanations for future reference.

• When you are about to be admitted, select a hospital where the room rent or the treatment cost falls within your sub-limit.

• If a particular treatment exceeds the sub-limit, you may consider discussing an alternative but less expensive treatment with the healthcare provider. It could help you stay within your insurance coverage limits and reduce your out-of-pocket expenses.