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Despite having health insurance, thousands of Indians face unexpected out-of-pocket costs during hospitalisation. A 2023 IRDAI report found that over 60% of claims settlements fall short of actual billed amounts. The culprits? Room rent caps, non-payable items, exclusions, and sub-limits; fine print most policyholders never read, but end up paying for.
Digital-first insurers like ACKO have entered the scene to address some of these pain points, yet the broader market still struggles with outdated plan structures. In a country where medical inflation is estimated at 14% annually, a standard health policy often feels like a seatbelt that clicks but doesn’t lock. The understanding that insurance automatically guarantees us financial protection is outdated to a point that it’s almost dangerous. Today, understanding the real cost of hospitalisation is just as important as having a health plan itself.
The Illusion of "Full Coverage"
Most individuals opt for what insurers call a “base policy”, a traditional indemnity cover that reimburses hospitalisation costs. But the devil lies in the details:
Room rent limits
A cap or limit of ₹3,000 per day can push you into a general ward when the actual room costs ₹7,000 or more. Worse, it often reduces the payable amount for other services proportionately.Sub-limits
Common procedures like cataract or hernia surgery may have artificial cost ceilings that ignore real hospital charges.Non-medical costs
Gloves, syringes, surgical tapes, admission kits, over 50 such items are not covered by many standard policies.Exclusions and waiting periods
Pre-existing conditions often come with 2-3 years of waiting. Maternity benefits are also largely excluded or require long waiting periods.
Medical Inflation: The Silent Pressure
Private hospitals continue to upgrade infrastructure and services, which in turn pushes costs upward. India's healthcare inflation is nearly double the general consumer inflation rate.
Here’s a snapshot of current private hospitalisation costs (average figures across metros):
Procedure | Approx cost in INR (₹) |
Knee replacement | 3.5-6 lakhs |
Angioplasty | 2-3 lakhs |
ICU stay (per day) | 35000-60000 |
C-section delivery | 1.5-2.5 lakhs |
For a salaried middle-class household, one major hospitalisation can derail a year’s worth of savings, even with insurance in place.
On Paper vs. Reality: An Example
Let’s say, Priya, a 34-year-old marketing executive in Bengaluru, was hospitalised for dengue and stayed in a private hospital for five days. Her total bill came to ₹1.9 lakhs. She had a standard health insurance policy with ₹2 lakh coverage and assumed she’d be fully protected.
But when the claim was processed, she was shocked to find that only ₹1.3 lakh was approved. The remaining ₹60,000 included room rent differentials, non-payable items like gloves and syringes, and diagnostic costs beyond sub-limits, all of which weren’t covered by her insurance policy.
Why a Better Insurance Approach Matters
Traditional health policies often come with hidden clauses and outdated limits that don’t reflect today’s medical costs.
As private healthcare becomes more expensive, policyholders need coverage that adapts to real-world hospital billing.
A more modern, flexible approach to insurance can:
Eliminate rigid room rent limits
Include consumables and non-medical expenses
Cover a wider range of procedures and hospital types
ACKO Health Insurance Plans, for example, are designed with these gaps in mind:
No paperwork and 100% digital experience
Options to add room rent waivers, ambulance cover, and consumables
Affordable premiums tailored to urban and semi-urban needs
By addressing the real cost of care, these plans offer protection that goes beyond just basic coverage.
What to Look For in a Modern Health Plan
To truly avoid exposure, here are a few features to prioritise when evaluating or upgrading your plan:
No room rent limits - This allows you to choose the best available room without penalties.
Coverage of consumables and non-medical expenses - These account for 5-15% of your bill.
Cashless across all hospitals - Not just network hospitals.
Pre and post-hospitalisation - Ensure at least 60 days post-discharge coverage.
Unlimited reinstatement - Especially relevant if you have multiple claims in a year.
Insurance That Thinks Ahead
Health emergencies are unpredictable. And as urban India increasingly seeks quality over compromise in healthcare, the role of insurance needs to evolve. It’s no longer about “Do you have insurance?” but “Is your insurance enough?”
The real cost of hospitalisation teaches us this: coverage isn’t the same as protection. It’s time consumers moved from generic policies to smarter, tech-driven solutions that anticipate rather than react.
A seatbelt that doesn’t lock is not worth wearing. And a health policy that leaves you exposed is no safety net at all.
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