Query regarding capping on ICU charges

Hey Jayashankar,

Room rent limit in policy is a "per day" limit. This limit is a sum of ward charges and nursing charge levied by the hospital on a per day basis. You would notice that hospitals showcase their rates as:

Example 1 - General ward - Rs 2000, General ward Nursing - Rs 500

Example 2 - ICU charges - Rs 8000, ICU nursing - Rs 2000

This is a per day charge of the hospital.

In Indian context, most hospital price their services differentially based on the room/ward type. So the cost of care in double-sharing ward will be costlier than multi-sharing or general ward, the cost of care in private ward will be higher than the prices for double-sharing ward. Do not ask me the logic for it, this is just the market practice for several decades.

When you buy a health plan, the insurer specifies limit of room rent that the plan would allow on per day basis. Assumption here is that for the premium that you pay, the policy is willing to cover a certain cost upto sum insured under the condition that you stay within the limits proposed in your policy.

If you are crossing the limit, chances are the hospital's pricing is going to go up by 20-50%. Therefore, here the insurer introduces the concept of Proportionate Deduction (PD). In simple terms, insurer tells the customer that when you pick a room type whose per day charge (rent plus nursing charge) exceed the limit defined in the policy, the hospital is hiking the rate of services by 20-50%. That penalty has to be borne by customer and not the insurer because customer should have exercised the choice of lower room rent.

As per PD rule, the room limit in the policy as a percentage of the actual room charge of the ward in which patient is admitted is calculated. Only that percent of the bill is payable by the policy. So if I choose a ward whose rent plus nursing charge is Rs 6000 and my room rent limit in policy is Rs 4000, then only (4000/6000) = 67% of the bill is payable by policy, rest of the amount I have to bear.

I know most customers would crib saying I don't get to decide the hospital in emergency cases, or if the doctor is treating in a particular hospital, they have limited option, but then these are the contractual terms one should be aware of and should exercise discretion while choosing a room type or choosing a more cost effective hospital.

To some extent insurer is justified here because there are plans with no limits of room type but they are costlier with higher premium. If a customer wants to save premium, they themselves choose plans with lower limits. So the risk of PD also should be on the customer.

Happy to answer any followup questions.

Anuj Jindal

Co-founder

SureClaim