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What is the meaning of proportionate deduction and how it impacts coverage?

By Vishal MD in Health Insurance -Claims corner

Jun 15

Proportionate deduction is a clause in health insurance policies where if there is a capping on per day room charge in the policy and you avail a room higher than the eligible room all the other hospital expenses like consultation charges, surgeon charges, operation charges,etc.will get reduced as per the difference between the eligible and the availed room charge. Only the cost of medicines and consumables which are sold as MRP are paid as per actual.
For example, if you have an insurance policy for 2 lakhs and the room eligibility is 1 per cent of SI (2000/day). You get hospitalised in a hospital and the room charge is 4000/day and your total hospital bill is 20,000/- and the bill components are as follows
1) Room charge for 2 days- 8000
2) Consultation charge for 4 visits(200/visit)-800
3) Investigations-4200
4) Medicines-7000
5) Total-20000
You are eligible for only 2000 per day so all charges will reduce by 2000/4000 which comes to 50% for all except medicines. So the final payable amount will be as follows
1) Room charge for 2 days- 4000
2) Consultation charge for 4 visits(100/visit)-400
3) Investigations-2100
4) Medicines-7000
5) Total-13500
Insurance will pay only 13500 and the rest 6500 will have to be paid by you.
So, it is very important to check before buying any policy what the room limit is and try to buy policies without any limits as this will prevent the proportionate deductions. These policies may have slightly more premium but when needed during admission the coverage will be substantially higher.

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