According to experts, a 5% GST on hospital room rent may boost hospitalization costs in circumstances when the hospital room price exceeds Rs 5000 for non-ICU rooms.
The GST Council’s 47th meeting in June 2022 set a 5% GST rate for room rent (excluding ICU) that exceeds Rs 5000 per day per patient invoiced by a hospital.
When someone is hospitalized, they have the choice of selecting numerous sorts of rooms—single private room, twin sharing, suite room, and so on. Each of them has a distinct per-day room rent price that varies from hospital to hospital. Certain health insurance plans only cover a part of the room rent or put a limit on it (depending on the sum insured opted).
According to experts, the 5% GST on hospital room rent may boost hospitalization costs in circumstances when the hospital room rate exceeds Rs 5000 for non-ICU rooms.
“Under the new norms, a 5% GST would be levied on non-ICU hospital room rent over Rs 5,000.” This may result in a rise in total hospitalization costs in situations when the per day room selected for is more than Rs 5,000,” Dr Sudha Reddy, Head Of Health and Travel at Digit Insurance, told FE.
Who will be responsible for paying the GST on hospital room rent?
According to Dr. Reddy, since the relevant hospitalization expenses are normally carried by the insurer, the GST charges would also be handled by the insurer, with no direct effect on the policyholder during claim settlement.
Premiums to rise?
Dr. Reddy believes that if the GST raises total claims costs for insurers, health insurance prices would likely increase in the near future.
What are policyholders supposed to do?
Certain health insurance plans restrict the cost of hospital room rent. This limitation might be based on co-payment, in which the insured is expected to pay a part of the room rent out of his or her own pocket, or on the authorization of just specific kinds of rooms for hospitalization.
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In the event of a co-pay, the insured may be required to pay a percentage of the room rent cost, including GST.
“To avoid such a predicament, it is best to get a health insurance coverage that does not contain a room rent restriction.” “Always carefully examine the policy paperwork to verify that no extra payment is being levied by the insurer for room rent or any other sort of co-payments and other deductions,” said Dr. Reddy.