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What is Copay in Health Insurance?

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.

What is Copay (Copayment) in Health Insurance?

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.

Why is Copay Clause Included?

Putting in copay clauses in policies not only helps health insurance companies save a portion of expenses but also gives the company certain advantages as outlined below.

  1. Policyholders have to pay a portion of the fee; they are naturally discouraged to make claims for treatments over a common issue such as cough and cold, gastric distress, etc. which could technically be charged from the insurer.
  2. Paying a portion of the treatment means that users will be aware of the expenses they will also incur, thus bringing about a sense of ownership.
  3. Discourages people from seeking treatment from more expensive hospitals as they will also have to be a bearer of the expensive hospital bill.
  4. Mitigates the risk for insurance companies, as these companies operate on huge profits and losses. A 10% copay clause means that the company is directly saving 10% of all payments.

How to Select a Health Policy with Copay?

Here are some of the factors that you must consider when you go for a policy with copay:

  1. Copay percentage: This will be the percentage of the cost that the policyholder will have to bear. For example, if the insured individual incurs a medical bill of INR 50,000 and the co-payment clause is 10%, then the insured is expected to pay INR 5,000 while the insurance company will pay the remaining balance of INR 45,000.
  2. Premiums: Most policies with a co-pay clause will have lower premiums. Ensure that you compare a policy with co-pay with other general health insurance policies and see how the premiums vary.

What is Co-Insurance?

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.

Features of Copayment

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:

  • Only a partial amount has to bear by the insured, the major part will be paid by the insurance company.
  • It applies to medical services, including hospitalization expenses, doctor’s fees, medicines, and lab tests.
  • Plans with higher monthly premiums generally have a lower copayment percentage.
  • Applicable mostly on senior citizen health insurance plans.
  • The basic objective of the copay is to save costs and discourage unnecessary claims.

Importance of Copay in Health Insurance

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.

  • It divides the risk between the insurer and the insured. Though, the insured has to bear a minimum amount of the claim.
  • It reduces the burden of large premium payments.
  • Senior citizens with pre-existing diseases get adequate coverage at a lower premium with a co-payment clause.
  • It also discourages the unnecessary use of luxury facilities and hospitals and encourages policyholders to make only necessary claims under health insurance.
  • It also lessens the misuse of health insurance policies.

Does Copay Impact Health Insurance Premium?

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

Difference Between Copay and Deductible

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.

Copay Clause in Religare Health Insurance

  1. If the age of the insured individual, or the eldest insured person (for floater plans) is 61 (in some cases, 71) or more when taking a new policy, a mandatory copayment amount of 20% (or sometimes 10%) will have to be borne by the policyholder. The insurer is only liable to pay the balance amount as long as it is under the total sum insured.
  2. If an insured person or eldest insured individual (for floater plans) reaches 61 years of age, we provide an option on the subsequent renewal to the policyholder wherein they can choose an additional 20% copayment option. The policyholder will get a 20% discount on their premiums.

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.

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