Health Insurance 199 views November 23, 2020

What is Co-pay in Health Insurance?

A copayment is a situation where the insurance company pays a part of the claim and another part of the claim is borne by the policyholder. For instance, if you have made any research, you will notice senior citizen health insurance policies come with co-payment clauses. Usually, for pre-existing illnesses, insurance companies put a waiting period for a particular illness, but in senior citizen policies, sometimes there remains no waiting period. Instead of waiting periods, the insurance company puts a co-payment clause where if the policyholder is hospitalized, the insurance company bears a part of the cost, and the policyholder pays a part of it as well. You may note that the premium amount is lower for copayment in health insurance as compared to other policies. So you need to learn more about a health insurance policy before you buy it. And in this post, you will know in detail about the Co-pay in Health Insurance.

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Difference Between Co-pay in Health Insurance and Deductible

If you are new to insurance, you might get confused between copayment and deductible because both require the policyholder to make payment during the claim process. But actually, these two clauses are entirely different.

A Health Insurance deductible is a fixed amount, such as INR 5,000 or INR 10,000, which the policyholder needs to pay before the claim arises, and the rest is covered by the company if the claim amount is within the coverage limit.

On the other hand, co-pay in Health Insurance bears a portion of the expenses in a 70/30, 40/60, 80/20 and other ratios as specified in the policy. The co-pay ratio is decided between the insurance company and the policyholder.

Suppose you buy an insurance plan with a co-pay structure of 70/30. Now, if a claim arises and it is INR 1 lakh, the insurance company will pay INR 70,000 and you need to pay the rest of INR 30,000.

What are the Advantages of Co-pay in Health Insurance?

An advantage of Co-pay in Health Insurance is that it helps lower the premium towards the insurance policy. Even if the policyholder has to pay a part of the claim, it can prove beneficial because it reduces the periodic expenditures by lowering the premium payment amount.

What are the Disadvantages of Co-pay in Health Insurance?

Sometimes there are insurance policies which demand a high copayment amount, which can potentially stop the insured person from seeking proper healthcare. Co-pay in Health Insurance puts the insured person at a disadvantage, as they aren’t able to avail adequate healthcare from the insurance provider, without paying a portion of the same from their income. A high co-pay means less premium, but you will end up paying more towards the treatment expenses.

To avoid confusion about Health Insurance, you must read the policy paper carefully. Check the company terms and conditions that are stated in the policy document. And learning more about co-pay in health insurance beforehand will help you plan the expenses better.

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