Business & Investment

4 Reasons Your Health Policy May Not Cover All Your Medical Expenses

Covid-19 calls for many to include health and life insurance in their basic financial plans. It also revealed a number of issues faced by policyholders when claiming claims, especially health insurance policies.

In a recent survey conducted by BusinessLine Portfolio Regarding the impact of pandemics on personal finances, a significant number of participants reported receiving far less charges, especially during Covid’s hospitalization. This may be due to several conditions embedded in the policy document, such as out-of-pocket clauses, sublimits, waiting periods, and coverage exclusions. The Insurance Ombudsman Annual Report, 2019-20, states that the lack of clarity of some of these provisions of insurance policies is one of the reasons for policyholder complaints about claims. I will.

Here, in order to make a well-informed decision when purchasing health insurance, there may be a gap between the amount of health insurance actually received and the amount of medical expenses, or it may not be offered as insurance. I will explain the reason.


WHealth insurance usually covers the entire length of stay, but if applicable, there are some provisions that limit the insurer’s settlement.

The key factors are where to buy the insurance policy and where to be hospitalized. Medical costs in big cities like Mumbai (Tier-1) are higher than in Tier-2 or Tier-3 cities like Coimbatore and Gurgaon, so there are differences in claims.

Therefore, if you purchase insurance at Coimbatore and are hospitalized in Mumbai, your bill will be lower than the medical costs incurred due to the out-of-pocket clause. Let’s understand this with an example. Max Bupa’s GoActive Health Insurance allows individuals who pay premiums in Zone I (including cities such as Mumbai and Delhi) to receive treatment throughout India at no cost.

However, for those who pay premiums in Zone II cities (Bangalore, Chennai, Hyderabad, Pune, etc.), 20% out-of-pocket payment will be applied to Avail’s treatment at Zone I hospitals. However, if you are treated in a Zone II or Zone III city, you will not be charged. This means that if you cover 10 larks in Pune and have insurance available for treatment in Mumbai, the insurance company will pay 80%. The remaining 20 percent need to be taken care of by you. Zone classification depends on your health insurance and insurance company.

You can upgrade your health insurance zone at the time of purchase (for additional premiums) only if you want to avoid unnecessary hassle at the time of billing. Alternatively, there are health policies on the market that remove the out-of-pocket costs for each zone. If you don’t mind the extra premium, you can go for them.

Room rent restrictions

SSome health insurance covers hospitalization costs based on the room charge sublimits listed on the insurance. If you exceed the rent limit for this room, you will be billed proportionally for the entire hospitalization fee, which will reduce your billing. This means that the insurance company will only resolve final claims on a proportional basis, as it will also increase claims for other costs, including consultation fees, long-term care, and other equipment, based on the room you occupy.

Consider Joe, a 30-year-old individual with an insurance coverage of Rs 100,000 (SI). His health policy has a room rent limit of £ 5,000 per day. On admission, the hospital will provide him with a room of £ 6,000 per day. Therefore, Joe receives only £ 5,000 a day from the health insurance company and he has to pay the remaining £ 1,000. If the final bill is 9 larks, the insurance company will only settle 8.33 larks (the ratio of the rent of the covered room to the rent of the actual room).

However, many health policies have abolished room rent restrictions. For example, Tata AIG Medicare Premier, ICICI Lombard Complete Health Insurance, Max Bupa ReAssure, and Apollo Munich Optima Restore have unlimited room rates.

There are no explicit room rent restrictions, but they do exist in some way. For example, Aditya Birla Health Insurance’s Active Health policy has no upper limit on room rent for the Platinum Premiere variant of the plan. However, when considering other variations of the same policy, if the SI is up to 3 larks, you are eligible for a shared room or a single private room, and if the SI is 4 larks or more, you can use any room.

However, in order to standardize the claim settlement process, insurance regulator IRDAI has established that related medical costs (pharmacy, consumables, implants, medical devices, diagnostic costs) cannot be subject to proportional provisions. Did. Insurers are not allowed to claim in proportion to the ICU. In other words, the actual cost must be paid by the insurance company if it is within the coverage of health insurance, regardless of whether the insurance has a room charge limit.


TIf you are over a certain age, your bill may be lower (than your medical bill). In other words, some insurance offered by some insurance companies has an out-of-pocket clause for policyholders over the age of 60. For example, family and personal care health insurance is 20 percent out-of-pocket for each claim if the insured or the oldest member is 61 years of age or older. However, if you do not want to cover part of the claim at the time of claim, especially for age reasons, you can avoid the out-of-pocket clause by paying an additional premium.

Other sublimits

THere are the sub-limits specific to insurance coverage such as childbirth, ambulance and OPD coverage. In these cases, the claim will only be resolved to the stated limits and will not be fully resolved.

There is an upper limit to home treatment costs.under Hospitalization at home, The insured will be treated at home if the hospital room is not available or if the insured cannot be taken to the hospital. Most health policies launched in the past year target home care up to SI. However, if treatment is continued for 3 consecutive days, it will help patients affected by Covid-19. However, there are some policies that only cover up to 10% or 20% of SI at home. For example, Liberty General Insurance’s Connect Health Policy covers up to 10% of SI for home hospitalization.

OPD The cover also has certain restrictions. For example, Aditya Birla Health Insurance’s Activ Health Policy (Platinum Enhanced) allows OPD coverage for £ 1,000 per insurance year and an SI of over Rs 150,000. OPD consultations usually cover costs such as diagnostic and preventive testing, prosthodontics, physiotherapy, pharmacy costs, and dental care. Recently, many insurers have offered to cover telemedicine as part of their OPD. However, this coverage depends on the insurance company.

Other covers Ambulance compensation, hospital cash, and the latest treatments (including treatments such as robotic surgery and stem cell therapy) are also limited.

When health insurance may not cover you at all

Certain conditions in your health policy prevent you from fully reimbursing your medical expenses, but you still get some of the money spent. However, your policy may not pay at all.List them here

Waiting period

Health insurance has three waiting periods before it is covered. The initial waiting period is 30 days, the existing disease waiting period is 2-4 years, and the disease-specific waiting period is 1-4 years. .. Covid’s unique health policy Corona Kavach and Corona Rakshak have a 15-day waiting period. Maternity coverage also has a waiting period, typically 24-48 months. If you choose serious illness compensation as an add-on, or if you choose a serious illness policy, you will face a 90-180 day waiting period.

Keep in mind that paying additional premiums can reduce your existing illness or illness-specific waiting period. For example, policyholders can choose to reduce the childbirth waiting period in Manipal Signa’s Pro Health Policy from 48 months to 24 months.


It applies to serious / terminal illnesses. This is basically the time frame in which the insured must survive for the shortest period after diagnosis. Lifespans vary from 7 to 30 days, depending on the insurance company. Serious illness insurance or rider is a benefit insurance that the policyholder receives a lump sum at the time of diagnosis, so the benefit is paid only if the insured survives the period stated in the policy. For example, the Bajaj Allianz General CI policy has a lifetime of 30 days.

Report of serious illness

Another important thing to keep in mind when buying health insurance is that the list varies by insurer, but only covers the list of serious illnesses. The number of illnesses covered varies between 20 and 65 illnesses, depending on the insurance company. Keep in mind that while major serious illnesses are covered by most insurance companies, not all stages of the illness are covered. For example, in the case of cancer, only the first outbreak is covered. Most of the time, the disease reoccurs and the patient is self-protecting.

Specific cost: Non-medical expenses such as baby food, laundry, diabetic shoes, arm slings, and diapers are not covered. Each health insurance has an appendix list that lists the costs that are not covered by the insurance. Similarly, except in some cases of accidents, burns, or cancer treatment, costs associated with weight loss, transsexual treatment, plastic surgery or cosmetic surgery are at risk to the insured by medical professionals. Unless otherwise specified, no compensation will be given.

Profession: Health insurance does not cover the costs associated with the treatment required to participate in dangerous or adventure sports such as parajumping, rock climbing, rafting, motor racing, scuba diving and skydiving. Apart from this, suicide and intentional injury are not covered along with unproven treatment, infertility and costs associated with infertility.

4 Reasons Your Health Policy May Not Cover All Your Medical Expenses 4 Reasons Your Health Policy May Not Cover All Your Medical Expenses

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