Hidden Clauses in the Fine Print of Health Insurance Policy

Importance of Reading the Health Insurance Policy Fine Print

Let us understand the importance of reading the fine print of health insurance policy with an example.

Mr. Sharma, who got his cataract operation done last month, is unhappy with his insurer because the insurance company has rejected his reimbursement claim. But, you may be wondering why?

Well, the insurer rejected Mr. Sharma's claim because the fine print of his policy clearly stated that cataract is not covered in the first year of the policy.

This shows the importance of reading the fine print carefully. If Mr. Sharma had read the terms and had delayed the operation by a year, he would have easily got the reimbursement.

Top 6 Hidden Clauses in the Fine Print of Healthcare Policies

Take a look at the hidden clauses that people mostly ignore when buying a mediclaim insurance policy:

1. Pre and Post-Hospitalisation Expenses

   Many policyholders are unaware that health insurance covers medical expenses before and after hospitalisation. Under pre-hospitalisation expenses, the insurance company reimburses medical expenses that a policyholder incurs before getting hospitalised, typically for up to 60 days. It includes expenses incurred on blood test, X-ray, urine test, etc.

   In contrast, post-hospitalisation expense covers follow-up consultations, medications, and tests for up to 90 days after getting discharged from the hospital. Make sure you read the fine print carefully to know the exact coverage details.

   NOTE: Therapies such as acupuncture and naturopathy are not covered, whereas consulting fees and diagnostic charges are covered.

2. Waiting Period

   Many buyers overlook the waiting period in health insurance, which affects when they can start claiming mediclaim benefits. It refers to the time during which no claims are accepted, regardless of medical needs.

   The waiting periods are of three types:

   • Initial Waiting Period: Most policies impose a 30 day initial waiting period from the start of coverage, during which no claims are allowed, except for accidental injuries.
   • Pre-existing Diseases (PEDs) Waiting Period: If you have a PED, the waiting period can range from 2 to 3 years, depending on the insurer.
   • Specific Diseases Waiting Period: For certain ailments, such as hernia or cataracts, the waiting period can be up to 3 years from the policy start date.

   Understanding these waiting periods helps avoid unexpected claim rejections and ensures better financial planning for medical expenses.

3. Room Rent Limit

   The room rent limit is a small yet crucial clause in health insurance policies that can lead to unexpected expenses. Your policy sets a maximum daily room charge limit, and if you choose a room that costs more, you must pay the difference. But that's not all!

   Hospitals charge for services based on the room category. So, if you opt for a higher-priced room, not only will you pay the extra rent, but other medical expenses, such as doctor fees and surgery costs, will also be proportionately higher. The insurer will only cover charges based on the eligible room category, except for items with fixed MRP.

   The tabular example below will make it simpler for you to understand this clause:

   Sum Insured	₹5, 00,000
   Room Rent Limit	₹3,000
   Actual Room Rent	₹7,000
   Days of Hospitalisation	5
   	Actual Bill	Reimbursed Amount	Rationale
   Room Charges	35,000	15,000	Proportional
   Doctor Charges	14,000	6,000	Proportional
   Medical Tests	7,000	3,000	Proportional
   Surgery Costs	1,40,000	60,000	Proportional
   Medicines	21,000	21,000	At MRP
   Total Costs Incurred	2,17,000	1,05,000
   Out-of-Pocket Expenses	1,12,000

   Hence, you must always read the fine print and check your policy's room rent limit before you decide on a room in a hospital.

4. Co-payment

   Co-payment is the percentage of medical expenses you must pay out of your own pocket while the insurer covers the rest. This clause is more common in policies covering PED or senior citizen health insurance policies.

   For example, if your policy includes a 20% co-payment clause and your hospital bill is ₹2 lakh, you will need to pay ₹40,000, and your insurance company will cover the remaining ₹1,60,000.

   So, always check the co-payment percentage before purchasing a policy, as it might increase your out-of-pocket expenses.

5. Deductibles

   A deductible in health insurance is the fixed amount you must pay before the insurance company starts covering your medical expenses. Policies with deductibles generally have lower premiums, but they require you to bear initial medical costs.

   For example, if your policy has a ₹5,000 deductible and your hospital bill is ₹20,000, you must first pay ₹5,000, and the insurer will cover the remaining ₹15,000.

   Always check the deductible clause to understand how much you might have to pay before your coverage kicks in.

6. Renewal Age Limit

   The renewal age limit is another hidden clause that you must check while buying a medical insurance policy. Some plans which target specific audience comes with renewal age limits after which health insurance companies refuses to renew the policy. So, ensure you check the age limit for health insurance renewal in the fine print.