Medical inflation has been rising at a high growth rate for the past few years in India. As per one report, India recorded the highest medical inflation of all Asian countries at 14% in 2021. As a regular citizen, you are likely to feel the pinch in your pocket when you visit a private hospital. Aside from the main treatment costs, there are many aspects that make up the hospital bill. One of the most important aspects of any hospital bill is the room rent.
A comprehensive health insurance
policy that extensively covers room rent is, therefore, quite important.
Recently, the GST (Goods and Services Tax) council introduced a 5% GST on hospital room rent, applicable from July 18, 2022. Here is how this GST can affect your hospital bills and, to a certain degree, your health insurance premiums.
Understanding the implications of 5% GST on room rent
The room rent, as the term suggests, is the money you have to pay for occupying a room in the hospital for a certain period. If the patient has been hospitalised for many days, the room rent charges can be quite hefty. The room rent differs as per the type of grade of the room and the hospital as well. Most health insurance
providers cover the room rent to a particular extent.
As per the new GST norms, if the daily room rent is more than Rs. 5000, then a GST rate of 5% will be applicable to the bill. If the room rent is less than Rs. 5000, no GST will be levied.
So, let’s assume your loved one is admitted to a hospital for 3 days, with each day’s room rent being Rs. 5500. Now, since the charge in question is more than Rs. 5000, a GST of 5% will be applicable to each day’s room rent.
Thus, your room rent charges for a total of 3 days would be:
Rs. 16,500 (room rent charges without GST) + Rs. 825 (5% GST each for 3 days) = Rs. 17, 325
If you have a family health insurance
plan, you can rest assured as the hospital bills would be covered by the insurer as per the sub-limit mentioned in the plan.
It is important to note that the 5% GST charge will be applicable to non-ICU rooms only. * Standard T&C Apply
How does your health insurance get affected by 5% GST on room rent?
As mentioned earlier, the room rent coverage is covered by your health insurance policy
. So, as of now, if you are covered under one, you do not have to worry about the GST implication.
However, this means that the insurance provider has to pay a larger amount to the hospital every time you get hospitalised, and the daily room rent is more than Rs. 5000. If you are admitted to an expensive hospital, the GST itself can go into multiples of thousands.
For this reason, there may be a hike in your health insurance
If you do not wish to be at the receiving end of this hike, you can consider buying a plan that does not cover room rent or only covers it to a low limit. Many standard health insurance plans often have limited coverage, room rent capping, and affordable premiums. It is important to select a health insurance plan that meets your coverage needs without overshooting your budget. * Standard T&C Apply
Why health insurance is important for everyone
Whether health insurance premiums rise or not due to the 5% GST on room rent, it is important that you secure yourself with a health plan for the following reasons:
Mental peace and preparedness
Medical emergencies can prop up anytime. And with medical costs rising, such an event can really eat into your savings if you are not prepared with a health insurance policy
Nowadays, you no longer have to pay the hospital bills from your pocket and wait for the insurer to reimburse you. With cashless hospitalisation, the insurer pays the bills directly and deals with the payment activities pertaining to the network hospital. *
Most health insurance plans cover pre- and post-hospitalisation, along with AYUSH treatment, diagnostic tests, annual medical check-ups, ambulance charges, day-care procedures, and so on. This means that you do not have to get hospitalised to take advantage of your health insurance
* Standard T&C Apply
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