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 What are ICU Charges?

An ICU or Intensive Care Unit is built to host patients who are severely ill and require round-the-clock, intensive medical care. Since ICUs have to be exponentially more equipped and monitored than other hospital rooms, the ICU charges are also significantly higher. Let’s take a look at the two main contributors to the ICU charges in hospitals.

1. First and foremost, an ICU contains a lot of expensive equipment required to monitor the vitals of a patient. These include (but are not limited to) :

  • Heart rate monitor

  • Blood pressure monitor

  • Ventilator services

  • Oxygen level monitoring

  • Since an ICU has to be extremely sterile, air conditioners and air filtration systems need to be installed.

2. In addition, the manual labour costs are significant as ICU patients require round-the-clock monitoring and checkups by doctors or nurses, which are typically senior.

Does your health insurance cover ICU charges?

The limit to room rent in health insurance policy typically covers ICU charges as well in case you need the same. Put simply, a room rent clause limits the cost of the room to a certain percentage of the total sum covered. This means that if you have a health insurance policy that offers you coverage of Rs. 1 lakh, and you have a room rent limit of 2%, then this means that the insurance company will cover up to Rs. 2,000 a day for room rent.

 

As we’ve seen, ICU rooms can be significantly more expensive than your average room. This could result in your room cost being in excess of the amount that your policy covers.

 

How this plays out is a little more complex than it may seem. Let's take the same example. You may think that if your room costs Rs. 6,000, and your room rent limit is 2% (Rs. 2,000 on a Rs. 1 lakh coverage), then all you have to do is pay Rs. 4,000 per day for your hospital stay, right? Not quite! The reason you do not pay a flat Rs. 4,000 per day based on the previous example is that insurance companies take into account what is known as “proportionate deduction”.

Proportionate Deduction

If you pick a room that is outside of your daily room limit, then the insurance company will provide coverage based on the proportion of the room rent limit vs the total rent paid. Put simply, the formula is:

 

Coverage Amount = (Room Rent Limit / Room Cost) x Total Cost

 

This is because the type of room you choose usually determines how much a hospital will charge you i.e, someone in a cheaper room may be charged less for the same treatment than you. If you have to opt for a room with a higher cost than allowed for by your room rent limit, this potentially inflates the costs of treatment and thus the amount that the insurer must provide.

 

Let's take an example. You have a cover of Rs 5 lakhs and a 2% room limit giving you a rent limit of Rs 10,000 a day. Let’s say that you require an ICU for 5 days at Rs 15,000 / day. In total, your hospital bill is 2 lakhs. The amount that the insurance company would be willing to pay would be:

 

Sum Paid out = (10,000/15, 000) x 2,00,000

 

= Approx. Rs 1,33,000

 

The insurer will thus pay out about 66% of the total hospital bill.

 

As you can see, the room rent limit is a crucial factor in picking your health insurance policy as it is bound to affect your claim should you require an ICU.

 

If you are more likely to visit Tier-1 hospitals that have expensive rooms (above Rs. 6,000 to 7,000), then you might want to pick a health insurance policy that simply does not have a room rent limit. This is because if the cost of your room goes beyond the limit, then this will (as we saw in the example above) affect your entire policy payout, which could be reduced by a significant amount.

 

Alternatively, if you live in a place that has mostly Tier-2 and 3 hospitals, you could get away with a lower room limit, as the cost of the room is unlikely to be high.

Conclusion

One thing to note while considering ICU charges in a hospital is that the cost of the room is not directly proportional to the quality of treatment you receive. It is also possible to get excellent medical treatment at a hospital that does not have fancy, expensive rooms. Furthermore, getting an expensive room may also determine how costly your overall treatment will be and thus how smooth your health insurance claim process will be.

 

If you are looking to purchase a health insurance policy, the Finserv MARKETS website has a wide host of offerings. You can visit the Finserv MARKETS website to pick a health insurance policy that best suits your needs and budget alike. 

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FAQs on ICU Charges in Health Insurance

  • ✔️In addition to ICU charges and room limits, what are the other types of sub-limits with health insurance?

    An insurance provider will usually set a limit on certain procedures in order to ensure that the most efficient use of funds is being made, such as kidney stones, tonsils, sinus, cataract removal and other standard procedures.

  • ✔️What happens if I exceed the sub-limit?

    Based on the type of sub-limit you exceed the penalty might vary, but there is always a financial downside to doing so, meaning you should avoid doing so if possible.

  • ✔️What will my health insurance policy not cover?

    A health insurance policy is to, as the same suggests, ensure you are healthy. Each insurer has a list of conditions and procedures that will deem ineligible for an insurance payout.

  • ✔️What can I do to reduce ICU charges?

    The best you can do is ensure the hospital is not overcharging you. That aside, treatment in the ICU is essential, and it is best to make sure you do not try to cut costs here.

  • ✔️What is the maximum ICU coverage?

    Generally, insurance providers might permit up to 2% of the total sum insured per day. 

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