5 Steps to Avoid Hidden Charges in Health Insurance India – Smart Hacks to Cut Surprises

Health insurance is designed to protect you from financial shocks for unplanned healthcare expense. Nonetheless, one of the most common complaints of policyholders is the surprise of hidden charges or out-of-pocket expenses during hospitalization or when making a claim. In many instances, these hidden charges occur as a direct result of clauses buried in the policy handbook or hospital billing practices or a lack of understanding about the process of making a claim.

The good news is, avoiding hidden charges is possible with the right approach and forethought.
This guide, in-depth guide walks you through 5 practical steps to ensure your medical expenses are aboveboard, and your health insurance is paying for the medical expense in and out of the hospital.

Choose the Appropriate Policy from the Beginning

The first step in avoiding hidden charges begins long before you set foot in the hospital; it starts the moment that you purchase the policy. Policyholders will focus mainly on premium amount forgetting to think about what features are most important and sacrifice those features to save on premiums. This is a point where insurers will impose terms that turn into out-of-pocket expenses.

a) Be Aware of Room-Rent Limits

A room-rent limit indicates the maximum amount your insurer will pay per day for a hospital room. If you select a room that costs more than the room-rent limit, you will pay the difference in room rent, and potentially the associated costs of other services–such as doctor’s visit or procedures–may be classified to your room type, which could be multiplied by those rates to your final out-of-pocket cost. For example, if the room-rent limit is ₹3,000 per day, and you rented a room for ₹5,000, the insurer may only cover 60% of other services under your policy.

Pro tip: Look for an insurance plan that has no room-rent limit or top-up policies that do not have any limits.

b) Look for Sub-limits and Co-payments

A sub-limit may limit the amount allowed for specific procedures like cataract surgeries or ICU days, while co-payments may necessitate you to pay a predetermined percentage for every claim. Both clauses can drastically reduce the amount of a claim that may be covered by the insurance.

Before applying, don’t just compare the premium, but compare the potentially hidden amounts above or below the limit amount. In many instances, you will find that the more coverage has the highest premium, but in the long-run it may pay for itself without co-pays or dollar-for-dollar sub-limits.

c) Examine Deductibles and Exclusions

A deductible is what you have to pay before the insurance company will contribute (cover) any medical costs. This may be cancelled out by exclusions such as pre-existing conditions or cosmetic procedures. Don’t assume exclusions are only for procedures that have not been done. Read the fine print and ask your agent to define ambiguous terms.

2️⃣ Ask for Pre-authorization & Estimates for Planned Procedures

With even a good policy, there is always a chance of a billing surprise caused by communication issues between the hospital and insurance company. If possible, get a written pre-authorization.

a) Pre-authorization for Procedures That Are Scheduled

If (for example) you have surgery that is scheduled, ask for an itemized estimate from the hospital, preferably before your admission. Then submit the draft itemized estimate to the insurance company for cashless pre-authorization. This way, you can see what will be covered and what will be your own payment.

b) Check Coverage for Implants / Consumables

Common hidden costs come from implants (stents, orthopedic implants) or consumables (gloves, syringes, specialized dressings). These may be classified as non-payable by your insurance company unless it is explicitly listed as covered.

Tip: Request a list of everything not covered from the hospital’s billing department. You can either negotiate or prepare for it.

c) Emergencies

In the case of emergencies, perhaps you won’t have the luxury to prepare in detail. Still, notify your insurer at the earliest. The earlier creates the best chance of speeding up your cashless approvals and reducing confusion down the line.

3️⃣ Document Your Time in the Hospital at the Same Time

Good documentation is often the difference between a smooth settlement of your claim to a dispute. Hospitals can be busy places, and documents can get lost. Start collecting and organizing documents immediately.

a) Notify Your Insurer as Soon as Possible

No matter if an emergency or a planned procedure, as soon as you are in and admitted, please inform your insurer or Third Party Adjuster (TPA). The earlier they know the better they can assist you through the claims process, and help you get cashless approval.

b) Retain Copies of All Important Documents

Snap photos or scan:

Your insurance contract and proof of identity.
Letters of authorization from the insurance company.
Hospital bills and receipts
Deposit slips and money you have contributed as a prepayment.

Storing these in the cloud or securely using your phones storage is ideal for sharing if the need arises.

c) Be Persistent About Obtaining Cashless Approval Until You Are Admitted

If you are going to stay overnight for treatment at a network hospital, be persistent if care is cashless. You won’t have to show large bills, and you will be protected from discrepancies in billing or double-billing. Once approved by the insurer in the letter, ensure the letter covers all treatment that is planned, or you may be surprised later.

4️⃣ Scrutinize the Final Bill Prior to Releasing You

The discharge process is often the time when many unexpected charges emerge. Hospitals will often add on items or may even accidentally charge you twice for some service(s). It can be very difficult to fix any of these issues once you pay the bill and discharge.

a) Ask for an Itemized Bill

An itemized bill will list all charges individually (consultation fees, medication, laboratory tests, room rent, consumables, etc.). Review and compare every charge on the itemized bill carefully.

b) Be Aware of Common Hidden Charges

Identify any of the following:
Charges for medicine or tests that were billed twice
Non-medical charges, such as charges for the use of the television or telephone, and family meals
Charge(s) for tests that were not actually performed

Be polite and point out any charge you do not recognize and ask that it be corrected before making any payments.

c) Obtain Original Invoices for Implants or Consumables

If you had a procedure that involved stents, implant, or any consumables with high cost, be sure to obtain the original invoice. Original invoices are usually necessary for reimbursement, warranty and/or replacement purposes.

5️⃣ Act Quickly in Case a Portion of Your Claim Is Denied or Paid

Despite precautionary measures, insurers may partially deny payment or approve the claim for a lesser value. Speed is of the essence.

a) Understanding the Insurer’s Reason

Read the claim settlement letter closely. Notice what clause or exclusion the insurer is referencing. That is the road map for your next step.

b) Collect Supporting Documentation

Collect all documentation related to your claim:

Operation notes

Doctor’s rationale

Implant invoices

Discharge summary

These will provide support and documentation for your appeal.

c) Submit a Written Appeal and Escalate If Necessary

You should submit a simple letter of appeal to the insurer’s grievance cell. If you do not receive a satisfactory response within the regulator’s prescribed timelines (usually about 15 days), you may escalate to the Insurance Ombudsman. The Ombudsman is a free and impartial body that provides resolution of disputes between policyholders and insurers.

Tips to Avoid Surprises When Choosing Health Insurance

When assessing health plans, always compare costs with IRDAI accredited health insurance aggregators, as they are all regulated by the same body—scoring consistency for you.

Make sure to renew on time so you do not lose coverage and need to endure new waiting periods or restrictions.

Have an emergency fund, even for insured expenses—there will always be out-of-pocket expenses—some things, like special diets or caregivers, are almost never covered.

Make sure to reread the latest IRDAI guidelines, as health insurance is subject to change and must comply with regulated standards to protect consumers.

Last Takeaway

Hidden fees in health insurance are not just annoyances, they can be serious disruptions to your finances at the time when stability is most needed. Almost all of the surprises that come in health insurance are a result of gaps in the consumer’s preparation.

The bridge to avoiding hidden costs occurs when you choose the right policy, get all pre-approvals, keep a paper trail for everything, audit your final bill and/or appeal quickly when a claim is partially settled to make sure you are being charged correctly.

You want your health insurance to provide comfort, not further suffering. A little rigidity today, and when a medical emergency arises, your insurance policy serve you and your family well—without the need to pay any extra for surprises.