What is Co-payment in Health Insurance Policy and How Does it Work?

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co-payment in healthcare  insurance refers to a co-pay clause, under which the policyholder has to pay some of the percentages of the insured amount and the rest is covered by the insurance company. The co-payment clause can vary from 10% to 20%, depending on the policy which you have opted for.

For example, an individual buys an insurance plan for 2 lakhs, with a 10% copay clause. If because of some mis happenings, he/she is hospitalized and the hospitalization charges are 1 lakh after discharge, then he/she has to pay 10% i.e.; 10,000 rupees from their pocket.

There are two ways in which a copayment policy can be claimed, cashless claim and reimbursement claim:

  1. Cashless Claim: In a cashless claim, you have to pay the amount according to the copay clause in your policy, and the rest is settled cashlessly by the insurer.
  2. Reimbursement Claim: In a reimbursement claim the policyholder has to pay for all the medical expenses that occurred during the hospitalization. All the bills then must be submitted to the insurance company which is then verified by the insurer and the amount is then reimbursed to the individual.

Why Insurance Companies Introduced a Co-payment Clause?

There are various reasons why the insurance companies introduced copay clauses in their policies.

  • Many policyholders misuse their policies by filing for false claims, which was a loss for the insurance company. By levying the copay clause, they prevent the policyholders from false claims.
  • The insurance companies have a large amount of capital flow. Introducing a copay clause helps them to maintain their profit and loss statements.
  • It prevents the policyholders from unnecessarily opting for expensive hospitals for their treatment, as the higher the medical expenses, the higher the copay amount a policyholder has to pay from themselves.
  • It also promotes the policyholders to follow a healthy lifestyle and seek medical attention only when necessary.Care Insurance company provides various options for insurance policies with copay clause.

Attributes of a Copay Insurance Policy:

  • Only a small percentage of the plan has to be paid, the rest is covered by the insurer.
  • It is mostly used for senior citizens and is very popular in big cities.
  • The copay percentage amount depends upon which plan have you opted for during buying the insurance policy.
  • The more premium you pay for a policy; the lesser will be the copay percentage that you have to pay.

Is Copay in Health Insurance Beneficial for You?

Most of the people in India are unable to afford a health insurance policy. This is due to the high premium amount that one has to pay. With a co-pay clause, the premium of the policy decreases, and its affordability increases.

One important thing to remember while buying a copay health insurance policy is that an individual should only go for it if he is living a healthy life and also does not have any medical history in his family.

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