Copay and Copayment for Health Insurance
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Fraudulent claims cost lots of money to the health insurance sector each year. According to the study conducted by EY (consultancy firm) on financial crime in India, there is a rise of 30% in insurance fraud since 2018 which is alarming. It’s not only affecting the insurance sector but also impacting innocent customers. Thus, to curtail claims frauds, copayment came into existence. Most of the health insurance providers offer health insurance with copay clause. So, if you are a new entrant in health insurance don’t let copayment confuse you.
In simple words, the copay in health insurance is the percentage of the claim amount that an insured has to bear from his or her pocket for the treatment. However, the rest of the amount will be paid by the insurer. Therefore, you can say that it is an admissible claim amount that both the insurer and insured pay on a sharing basis according to the respective percentages. The copay clause, along with the percentage, is always mentioned in the insurance policy and applies to medical services.
Nidima bought a health insurance policy and agreed for a copayment of 10%. She has the approved claim of Rs.1.5 lakh. In this case, she has to bear 10% of 1.5 lakh i.e. Rs.15000 as a copayment and the rest 90% will be paid by the insurer.
Thus, copay in health insurance is an arrangement made with the health insurance company, in which the insured will need to pay a part of the medical expenses on their own. The remainder of the amount will be paid by the insurance company.
Putting in copay clauses in policies not only helps insurance companies save a portion of expenses but also gives the company certain advantages as outlined below.
Here are some of the factors that you must consider when you go for a policy with copay:
In India, the terms copay insurance and co-insurance are used interchangeably. In a co-insurance contract, both the insurer and insured enter into an agreement where each party agrees to pay a fixed percentage of the medical bill. The percentages are usually represented as 90-10, 80-20, or 30-70 and so on, depending upon the clause. Copay health insurance, however, is the fixed amount to be paid for the availed medical services.
Understanding the concept of copay will help you to know the reason behind this clause and how much you have to contribute to your medical bills. Let’s talk about its basic features:
Health insurance jargon can puzzle you, so it’s good to know about different terminologies to make the most out of your insurance policy. Till now you have read about copayment, and its features now let’s understand its importance.
If you happen to have a co-pay clause, it can directly impact the premium that you are paying. If you have high co-pay with the deductible amount, naturally your insurance premium will be lesser. This is due to the fact that with high co-pay, the risk of payment is divided almost equally between the insured and the insurer.
>> Check: Health insurance premium calculator
When enrolling in an insurance plan, an individual has to pay a certain fixed amount before the insurance provider will cover any expenses; this amount is termed as deductible. Once the deductible is paid, the insurance provider will then pay for any kind of expenses incurred.
A copay option is a mandatory clause in an insurance policy. The insured generally pays a part of every medical bill. The primary difference is that a deductible is only paid once and a copay in medical billing means the insured has to pay a part of it.
However, it’s possible to purchase a health insurance plan without a copay clause. But in that case, you have to pay a higher premium. It splits the risk and liability of claim between the insurance provider and insured that makes plans affordable. So, you need to weigh your options and consider medical insurance accordingly. Check the health insurance coverage offered by Religare with copay clause that gives you more coverage and less obligation.