Health Insurance is one of the most sought out insurance services in India, what with the increasing health awareness and large medical bills. Due to the increasing demand, health insurance companies in India are offering different kinds of services and benefits for the same.
Co-pay is a facility provided by the insurer to the insured, where the insured agrees to pay a fixed part of the insured amount at the time of claim settlement. The amount to be paid by the insured is fixed at the time of policy purchase. Not all insurers provide co-pay facility, insurers that do offer, offer this as an optional add-on facility.
Where is co-pay applied?
Co-pay is applied on the below:
● All medical bills regardless of the kind of treatment or illness or the person being treated.
● Family floaters, if any.
● Reimbursement claims on bills for patient-care or OPD.
● At non-network hospitals that accept your insurance.
Reasons behind offering co-pay facility
There are a number of reasons why co-pay facility is offered in health insurance, a few among them are listed below:
● Discourages the policyholder from raising fraudulent claims
● Discourages the policyholder from making small or unnecessary claims
● Motivates the discretionary use of health insurance
● Allows the insurer to save a part on the expenses during claim settlement
● Discourages the misuse of health insurance policies
● Discourages people from availing treatments unnecessarily at expensive hospitals
● Lowers the insurer’s liabilities
Features of co-pay in health Insurance:
Co-pay comes with a number of features such as:
● Once you have paid your part, the insurer will settle the rest of the medical expenses
● If you pay high premiums your co-pay will be low, and if you pay low premiums, your co-pay will be high
Difference between co-pay and co-insurance
Co-pay and co-insurance are often confused by people. Co-pay is a fixed amount that the insured has to pay at the time of claim settlement while co-insurance is where the insured agrees to pay a fixed percentage of the total medical expenses.
Disadvantages of co-pay
Co-pay facility comes with certain disadvantages such as:
● A high co-pay amount can discourage the policyholder from availing expensive yet necessary medical care which defeats the whole purpose of a mediclaim policy
● A low co-pay will increase the policyholder’s insurance premium and at the time of claim settlement he/she will still have to pay part of the medical expense regardless of the high paid insurance premiums. This is an additional expense to the policyholder.
Co-pay in health insurance is similar to the concept of voluntary deductibles in car insurance. Regardless of the disadvantages, opting for co-pay facility trims one's health insurance premium which is a boon for all, thus making it a favourite among the policyholders.
