Ajay had blurred vision, so he consulted an eye specialist. The doctor diagnosed cataract and advised surgery. The surgery cost was Rs. 40,000. Ajay applied for cashless treatment to his health insurer. But he got approval for only Rs. 25,000. On probing further, he was told that the health insurance policy had a sub-limit of Rs. 25,000 per eye for cataract surgery.
Now, Ajay had two options. Either go with the surgery at the same hospital and pay the balance Rs. 15,000 from his pocket, or find another hospital where the surgery can be performed within Rs. 25,000. In this article, we will understand what a sub-limit in a health insurance policy is, its types, and its impact on hospitalisation expenses.
What is a sub-limit?
A sub-limit in a health insurance policy is the maximum amount that a health insurance company will pay. A policy can have sub-limits for specific medical procedures, such as cataract surgery, or for specified expenses, such as hospital room rent. If the cost of a specified medical procedure or expense exceeds the sub-limit, the amount beyond the limit must be borne by the policyholder from their pocket. A sub-limit can be referred to as a defined limit or a pre-determined limit.
A sub-limit can be an absolute amount or a percentage. It defines an upper limit beyond which the health insurance company will not pay. Health insurance companies include certain sub-limits in policies to keep hospitalisation expenses that they pay for in check. The inclusion of sub-limits helps them keep premiums reasonable.
Health insurers usually offer multiple variants of the same plan. The lowest plan variant may have lower sub-limits, with the next variant having higher sub-limits, and the highest variant having the highest sub-limits or full coverage. The higher the plan variant, the higher the premium.
Types of sub-limits
Now that we understand the meaning of sub-limits, let us look at some of the types of sub-limits in a health insurance policy.
- Room rent sub-limit
Hospitals have various types of rooms, including general wards, semi-private (twin-sharing), single private rooms, suites, etc. A health insurance policy may specify a sub-limit on daily rent for each type of room. A policy may not cover certain types of rooms, such as suites. So, if a policyholder decides to be admitted to such a room, they will have to bear the cost from their pocket.
The room rent sub-limit can be a specified percentage of the sum assured or a specified amount per day. For example, an individual may have a policy with a Rs. 10 lakh sum assured. If the room rent sub-limit is capped at 1% of the sum assured, it will be Rs. 10,000 per day. Some policies may have a specified amount capping, for example, a room rent sub-limit of Rs. 7,500 per day.
Suppose a policyholder chooses a room with a per-day rent higher than the specified sub-limit. In this case, the policyholder will have to pay a proportionate share of the hospitalisation bill out of their pocket and not just the room rent beyond the limit.
Apart from room rent sub-limits, an insurance policy may have an ICU rent sub-limit. In this case, the maximum amount paid for every day stayed in the hospital intensive care unit (ICU) is as per the sub-limit. For example, some health plans have an ICU rent limit of up to 2% of the sum assured per day.
When choosing a health insurance policy, choose one with no room rent sub-limits or with sufficiently higher room rent sub-limits. In the event of hospitalisation, it will ensure you can choose a room within the room rent sub-limit without paying any room rent charges out of your own pocket.
- Sub-limits for medical expenses for specific ailments/procedures
Most health plans have sub-limits on the amount payable for medical expenses incurred by the insured person for specific ailments/procedures, like
- Cataract treatment: Sub-limits for each eye
- Total knee replacement: Sub-limit for each knee
- Hernia surgery
- Hysterectomy
- Surgery for benign prostrate hypertrophy
- Surgical treatment of stones of the renal system
- Treatment for the breakage of bones
The sub-limits may vary as per the sum assured chosen for the same health plan. The higher the sum assured, the higher the sub-limit.
When choosing a health plan, check for the sub-limits on the above specific/procedures. If you want a higher sub-limit, check if it is available with a higher sum assured or with another variant of the same plan.
- Limits on modern treatments
IRDAI has listed 12 modern treatments that use advanced technologies. Some of these include stem cell therapy, oral chemotherapy, deep brain stimulation, immunotherapy, robotic surgeries, etc. Some health plans have sub-limits for these treatments, which can be up to 50% of the sum insured. In some health plans, sub-limits can differ for various modern treatments.
When choosing a health plan, check whether there are sub-limits on modern treatments and, if so, how much.
- Limits on pre- and post-hospitalisation expenses
An individual may have spent on doctor consultations, diagnostic tests, and medicines before getting hospitalised. Similarly, after hospital discharge, these expenses may continue till the individual fully recovers. Health plans cover these expenses under the pre- and post-hospitalisation expenses.
Some health plans cover the pre- and post-hospitalisation expenses up to the sum assured. Some health plans have sub-limits on these expenses up to a specified percentage of the sum assured. For example, a health plan may cover the pre- and post-hospitalisation expenses with a sub-limit of up to 10% of the sum assured.
When choosing a health plan, check if there are any sub-limits on pre- and post-hospitalisation expenses. If yes, consider a plan that covers these expenses up to the sum assured.
Apart from the features that we have discussed above, a health plan can have sub-limits for OPD expenses, ambulance charges, etc.
What to check in a health plan with sub-limits?
When choosing a health plan read the policy wording carefully. While going through the details, you will come across the various features of the plan that have sub-limits and the amount/percentage. The section will mention the plan variants / higher sum assured options where the sub-limits go up. Accordingly, you can choose the sum assured or plan variant with the highest sub-limits. However, note that the higher sum assured / plan variant will have a higher premium.
Some plans offer a sub-limit add-on for certain features. With an add-on, you pay an additional premium for removing the sub-limit. Thus, you get full coverage for that feature without any sub-limit.
If you find it challenging to choose the right plan, seek help from a health insurance agent or health insurance expert. They will evaluate your needs and accordingly recommend the appropriate health plan that suits your needs.
