To understand how co-pay is different from deductible, first we need to understand what deductible means. While medical emergencies come unannounced, still, in case you don’t anticipate a large hospitalization expense coming your way and can afford to pay the fixed out-of-pocket expense, you can consider opting for the co-pay clause. So opting for the co-pay feature would enable them to get the insurance cover while keeping the premium low. In such cases, instead of being uninsured or underinsured, it makes a lot more sense to opt for the right coverage amount even if you have to pay a part of the medical bill from your own pocket in future.Ĭo-pay also makes sense for those who are in their old-age, as in such cases, the premium rates are quite high for senior citizen plans. Ideally, one should opt for the co-pay feature if it is difficult for the policyholder to afford the premium for the sum insured that he/she needs, or wants. By opting for co-pay, one can lower their annual insurance premium by around 20% to 30%. So essentially, one can say that co-pay is a tradeoff between paying higher premium amount every year and paying a part of the claim if such a need arises. However, the customer would have to pay a higher annual premium. On the other hand, if they go for the same policy without the co-pay clause, then the insurance company would pay the entire claim amount of INR 5 lakh. This works irrespective of whether the plan falls under a cashless claim or the reimbursement one.īy opting to pay 10% or the medical bill, if and when there is a medical emergency, the customer is able to get a relatively lower premium quotation from the insurer, and hence saves money every year. The rest INR 4.5 lakh would be paid by the insurance company. If they get hospitalized and the total bill comes to, say, INR 5 lakh, then they would have to pay INR 50,000 from their own pocket. Let’s say that someone purchased a health insurance policy with a sum insured of INR 10 lakh and a co-payment clause of 10%.
Let’s understand this with the help of an example. The balance is borne by the insurance company. In the co-payment model, usually, the insured needs to pay 10% to 25% of the claim value. In return, the policyholder gets a lower annual premium while getting a higher sum insured. On one hand, the insurer benefits from the co-pay option because a part of the claim would be paid by the policyholder. This is actually the result of an agreement between the insurer and the insured where both benefit. And it is not as if it is a complete disadvantage for the policyholder. Here’s what you should know – this out-of-pocket expense is only applicable when the policy terms and conditions mention this. Now, you may wonder why one would pay this out-of-pocket amount when they have opted for a health insurance policy. What is Co-Pay in Health Insurance?Ĭo-pay, or co-payment, is basically a fixed proportional amount that the policyholder has to pay out of his own pocket while making a claim under his/her health insurance plan. So, in a world with intensifying diseases and soaring medical costs, what can people do to save up on their hard-earned money? Do they risk it all by not having any insurance coverage at all because of the premiums? Or is there a way where they can ensure they are protected in case of any medical emergency while not paying through the roof for insurance coverage? This is where the concept of “co-payment” comes into the picture, which is a common way to save up on premiums for the policyholder. Moreover, they also realize the importance of protecting themselves financially against those costs by opting for a sound health insurance plan. To put it simply, the general population today understands the implications of the rising cost of medical care. More households today have at least one member covered under a health insurance policy than ever before. This is exemplified by the fact that there’s been a fresh 30% to 40% (YoY) growth in premium driven by standalone health insurers. Witnessing significant growth, health insurance is no longer seen as a privilege but as a necessity.
The Covid-19 pandemic has been instrumental in catalyzing the awareness around health insurance in India, where insurance penetration still paints a dismal picture.
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