Common health insurance mistakes to avoid
The Medical Insurance Scam: How to Avoid Losing Lakhs
of Rupees
Imagine this: You receive a hospital
bill of ₹6 lakh, and since your medical insurance covers ₹15 lakh,
you expect a full settlement. But when you approach your insurance company,
they shock you with this response:
"Sir, we will only reimburse ₹2
lakh."
Sounds like a scam? Absolutely!
After paying hefty annual premiums of ₹40,000 to ₹50,000, getting back
only ₹2 lakh feels like a complete rip-off.
So, why does this happen? And more
importantly, how can you avoid it? Let’s break it down step by step.
Understanding
How Insurance Companies Calculate Your Claim
Here’s an example of a typical
hospital bill:
|
Expense |
Cost |
|
Room Rent (₹10,000/day for 7 days) |
₹70,000 |
|
ICU Charges (₹20,000/day for 3
days) |
₹60,000 |
|
Surgery Charges |
₹2,00,000 |
|
Tests & Diagnostics |
₹1,50,000 |
|
Medicines |
₹80,000 |
|
Doctor Visits (₹3,000/day for 14
days) |
₹42,000 |
|
Total Bill |
₹6,00,000 |
Now, you submit this bill to your
insurance company, expecting full reimbursement. But here’s how they calculate
your actual claim:
1.
Room Rent Capping
Most policies have a room rent
sub-limit. Suppose your policy allows only ₹5,000/day but you stayed
in a ₹10,000/day room. The insurer will reduce all associated costs
proportionally. This means:
- ICU charges
(₹20,000/day) will be adjusted to ₹10,000/day.
- Surgery charges, tests, and doctor visits will be slashed by 50%.
After applying these reductions,
your new eligible amount becomes ₹2,71,000 instead of ₹6,00,000.
2.
Co-Pay Clause
Many policies include a co-pay
clause (usually 20%), meaning you must bear a portion of the cost.
- 20% of ₹2,71,000 = ₹54,000 (which you pay)
- Insurance covers only ₹2,17,000
So, out of your ₹6 lakh bill,
you receive just ₹2.17 lakh—a loss of ₹3.83 lakh simply due to
policy limitations you may not have noticed!
Common
Health Insurance Mistakes to Avoid
To ensure you don’t fall into these
traps, here are 10 essential checks to keep in mind when selecting your
health insurance policy.
1.
Say No to Co-Pay
Never choose an insurance policy
with co-pay conditions. While it may lower your premium, it
significantly increases out-of-pocket expenses during hospitalization.
2.
Avoid Room Rent Capping
Choose a policy with no room rent
limit. If your policy caps room rent at ₹5,000/day but you choose a
₹10,000/day room, all hospital expenses will be reduced proportionally,
drastically lowering your reimbursement.
3.
Check for Disease-Specific Sublimits
Some policies impose sublimits on
specific treatments (e.g., ₹1 lakh for heart surgery even if your cover
is ₹10 lakh). Avoid these policies and ensure you have full coverage for
all treatments.
4.
Ensure Pre- and Post-Hospitalization Coverage
Choose a policy that covers at
least 60 days of pre-hospitalization and 180 days of
post-hospitalization expenses. These costs (tests, medicines, follow-ups)
often account for 10-20% of total expenses.
5.
Understand the Waiting Periods
Insurance policies have various
waiting periods that can delay claim eligibility:
- Initial Waiting Period: No coverage for first 30 days (except for
accidents).
- Pre-Existing Disease Waiting Period: Coverage kicks in after 2-4 years.
- Specific Disease Waiting Period: Some conditions (hernia, ENT surgeries) have 12-24
month waiting periods.
- Critical Illness Waiting Period: Some policies do not cover cancer or critical
illnesses for 2 years.
- Maternity Benefit Waiting Period: Often 9 months to 4 years. Choose the shortest
waiting period possible.
6.
Confirm Daycare Procedure Coverage
Daycare treatments (like cataract
surgery or appendicitis) don’t require overnight hospitalization. Ensure your
policy covers daycare procedures; otherwise, you might have to pay out
of pocket.
7.
Read the Fine Print on OPD Coverage
Outpatient Department (OPD) expenses
(doctor consultations, medicines, minor procedures) are usually not covered.
If your policy includes OPD benefits, check the limits carefully.
8.
Avoid Zonal Co-Pay Restrictions
Some policies divide cities into zones
and charge extra if you get treated outside your zone. Example:
- If you have a Tier 2 city policy and get treated in
Delhi, you might have to pay 20% extra.
- Opt for nationwide coverage to avoid this trap.
9.
Check for Restoration Benefits
If you use up your sum insured, some
policies restore your coverage free of cost. Ensure your policy offers 100%
restoration so that future claims in the same year are covered.
10.
Avoid Hidden Exclusions
Many policies exclude specific
illnesses, treatments, or conditions (e.g., mental health treatments,
robotic surgeries). Always check for hidden exclusions before purchasing a
policy.
Final
Thoughts
Medical insurance is meant to
protect you, but hidden clauses can turn it into a financial trap. By
carefully selecting the right policy and avoiding co-pay, room rent limits,
and sublimits, you can ensure you get maximum coverage without
unnecessary deductions.
For a hassle-free and transparent
insurance experience, consider platforms like Ditto, which provide
expert guidance and help you pick the best plan based on your needs.