All about Inpatient Coverage in Health Insurance

• Introduction
• What is Inpatient Care?
• 4 Important Conditions for Inpatient Expenses 
• Which Medical Expenses come under Inpatient Expenses?

This might come as a surprise to many of us! 

Prima facie it may seem that ‘Health Insurance’ would cover all their medical expenses. But, the truth is that most health insurance plans in India are majorly ‘hospitalization covers’. They cover expenses incurred during hospitalization and those related to hospitalization i.e. pre-hospitalization, post-hospitalization, etc. Plus, every health insurance policy comes with its own list of terms and conditions that one must be aware of in order to avoid any further surprises at the time of a claim.

In this article, we’ll learn about a basic cover of health insurance - that is, coverage for Inpatient Care expenses.

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Inpatient care is the healthcare provided when you get admitted to a hospital. In order for inpatient expenses to be covered by health insurance, the duration of hospital stay should be more than 24 hours. Unless covered under Day-care procedures, any treatment requiring less than a 24-hour stay at the hospital isn’t paid for by health insurance.

Here are the exact policy wordings taken from a health insurance policy document:

“We will indemnify the Medical Expenses incurred for one or more of the following due to the Insured Person’s Hospitalization during the Policy Period following an Illness or Injury.”

Let’s try to break this down so that we can understand better. The first BIG word you see is ‘Indemnify’. Now, what does that mean? 

In fixed benefit insurance products like critical illness insurance and term insurance, regardless of the expenses incurred/quantum of financial loss, your family is paid a sum assured upon the occurrence of the insured event like a diagnosis of a listed illness or death of the insured person. In health insurance, however, the insurance company will only compensate for the exact expenses you incurred (as long as it is lesser than the sum insured you have). So, even if you have a policy of INR 20 lakhs, if your hospital bill is INR 10 lakhs, the insurer will only pay INR 10 lakhs. 

In case the expenses exceed this sum insured, you will have to pay the additional costs out of your pocket. For example, if you have a policy of INR 5 lakhs and the expenses are INR 10 lakhs - the insurer will only pay INR 5 lakhs and the remaining INR 5 lakhs - you will have to pay out of your pocket. 

(Please note that - We’re simplifying this for the sake of this explanation. Usually, there will be cuts and deductions based on additional terms and conditions in the policy - but the maximum claim that’ll be paid will not be beyond the sum insured)

Further, for the insurance company to pay for the hospitalization expenses, there’s a list of conditions that need to be met.

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Inpatient expenses under health insurance will be covered only on the fulfillment of the following four conditions - 

1- Medically Necessary Hospitalisation

The insurance company will only cover inpatient expenses if the hospitalization or the treatment is medically necessary. 

What that really means is that the treatment or hospitalization -

• Is required for the medical management of the illness or injury suffered. 
• Must not exceed the level of care necessary to provide safe, adequate, and appropriate medical care in scope, duration, or intensity.
• Must have been recommended by a medical practitioner, who is not related to you. 
• Must conform to the professional standards widely accepted in international medical practice or by the medical community in India.

2- Active Line of Treatment

Health insurance will only pay when there’s an ongoing medical treatment while you’re hospitalized. If the hospitalization is just for diagnostic or monitoring procedures, the insurance company will not cover any expenses - even if the hospitalization is more than 24 hours and recommended by a medical practitioner. 

Suppose you suffer from an unusual stomach ache and visit the doctor - who evaluates everything and recommends that you should get admitted and be monitored for the next 24 hours because there are symptoms like sweating and mildly high blood pressure. Apart from monitoring and some medication, there was no treatment undergone. After more than 24 hours, the doctor found you to be stable and recommended discharge. 

In such cases, the insurance company will not cover the hospitalization expenses because there was no active treatment carried out.

3- Prescribed by a Medical Practitioner

This is the most important condition. Any treatment that you undergo at the hospital should be prescribed by a medical practitioner and -

• The prescription should be in writing.
• The hospital should have sought that specific medical practitioner’s opinion for the hospitalization
• The medical practitioner should not be related to you.

4- Reasonable and Customary Clause

A lot of hospitals hike their prices, several times a year - and could even have different room-rents for patients with and without insurance. (with insurance rates being more expensive). Insurers protect themselves from such excessive hospital billing with the help of the Reasonable and Customary Clause. 

With this clause, insurers can refuse to pay the overcharged amount if a hospital charges substantially higher than other hospitals within the same geographical area for similar services. As a result - you might end up paying a large part of the bill from your own pocket. 

To avoid this, (whenever possible) - get multiple quotes from nearby hospitals for the same treatment and compare the costs with your preferred hospital. It is okay if the costs vary by 10-20%. However, if the difference is way higher (say 40-50% higher) - then there is a possibility that the insurer will not pay the whole bill.

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Here’s a list of costs that come under inpatient expenses, incurred when you are hospitalized in a medical institution. 

Room Rent Charges

Room rent charge includes the daily rent that needs to be paid for using the hospital room.

Room Boarding & Nursing Charges 

Boarding charges are the additional expenses that are incurred when you use the hospital room. Some expenses contributing to this cost are food, cleaning, housekeeping, support staff, etc. Also, nursing charges are expenses of the nurses designated to take care of you while you’re hospitalized. 

Important note: Room-rent limits are applied on the sum of Room-rent + Room boarding and nursing charges. Sometimes, the hospital admission staff might show you a list of these charges separately. However, you need to be careful and consider the total amount - to match with the room-rent limit in your plan.

This is important to note because room-rent limits can lead to proportionate deductions - where you will have to pay a part of the entire bill if you choose a room that’s of a higher category than that your policy covers. This can come as a huge shock at the time of discharge - with a hefty bill burning a hole in your pocket. 

Medical Practitioners’ Fees

Fees of all medical professionals who attend to your needs while you’re hospitalized - such as primary treating doctors, duty doctors, physiotherapists, surgeons, nutritionists, etc. are covered. 

Cost of Investigative Tests or Diagnostic Procedures 

These include costs of tests or procedures that help diagnose, examine or monitor the illness/ disease. Some examples are x-ray, blood test, CT scan, biopsy, etc. 

Cost of Prescribed Medicines & Drugs

All medicines and drug-related costs will be covered if - 

• They are prescribed by the medical practitioner who is treating the patient.
• The medicines and drugs are related to the insured event that you have undergone.

Operation Theatre Charges

All expenses incurred in the operation theatre during the surgery come under inpatient expenses and are covered by health insurance. 

Cost of Implanted Devices & Prosthetics

The cost of prosthetics and medical devices such as orthopedic rods, pins, or screws that are implanted internally during surgery to replace, repair, or support a joint or a bone are covered under inpatient expenses.

Intensive Care Unit Charges

Many times, after the surgery is completed, you are taken to the intensive care unit for continuous monitoring. All ICU-related costs incurred are also a part of inpatient expenses.

Other Costs 

Here are some other expenses that are part of inpatient expenses and are covered by a health insurance policy - 

• Cost of intravenous fluids like saline
• Blood transfusion expenses
• Injection administration charges
• Cost of allowable consumables 
• Enteral feedings expenses 

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So, this was all about inpatient expenses. Hope this article helped you gain enough clarity about inpatient costs that are covered under a health insurance policy.

If you have any further questions, you can post them on the Beshak Insurance Forum, and get answers from insurance experts within 6-8 hours!