What Is Copay In Health Insurance?

Copay in Health Insurance is an amount which is borne by the policyholder. Certain Health Insurance plans offer an option to choose a copay percentage as per their needs, while others come with a mandatory copay clause. Although opting for a higher copayment and paying your medical expenses from your pocket may not seem like a good idea, a higher copayment will lower your premium payable. On the other hand, opting for a low copay will increase your premium payable, but will reduce the amount that you have to pay in the event of a claim.

For example, if you have opted for a copay of 20% on your Health Insurance policy and you raise a claim for Rs. 10,000, the insurer will pay only 80% of the claim amount. The remaining 20% i.e. Rs. 2,000 will need to be borne by you.

Why insurers use the copay clause?

  • To avoid fraudulent use of Health Insurance claims
  • To avoid small or unnecessary claims
  • To encourage discretionary use of Health Insurance
  • To ensure that you become a responsible stakeholder of your health risks

Features & Benefits of CoPay Health Insurance with Finserv Markets

  • If you have chosen a Health Insurance policy with copayment, you will have to bear a certain percentage (pre-determined at the time of policy purchase) of the medical treatments costs covered under your policy.
  • Only a certain portion of the health care expense is paid by the policyholder while the majority is paid for by the insurer.
  • Copay is often used interchangeably with “co-insurance”. However, they mean the same thing in India.
  • Although larger copay percentage works in the favour of the insurer, the insured can enjoy lower premiums.
  • Most senior citizen Health Insurance policies in India include the copayment clause.

Difference between CoPay & Deductible

The major difference between copay and deductibles is that copay represents a percentage of the claim amount whereas the deductible is a fixed amount. Both copayments and deductibles are predetermined before your Bajaj Health Insurance commences, however, the copay ratio is laid out in the contract, while the deductible is calculated yearly.

Difference between CoPay & Co-Insurance

Typically, both copay and co-insurance are used interchangeably. However, they do have differences. Under co-insurance, the Health Insurance provider and the policyholder enter into an agreement wherein each party agrees to pay a percentage of the total cost. A co-insurance percentage is denoted as 90-10, 70-30, 80-20, etc. wherein the insurance provider’s contribution is written first and the policyholder’s contribution is mentioned second. On the other hand, deductible is a fixed amount paid for different health care services. They are often used interchangeably to indicate the sharing of risk and liability between the insurer and the insured.

Disadvantages of Health Insurance CoPay

Not every Health Insurance provider may choose to add a copay clause to the policies they sell. This is because there are certain disadvantages for both the insurer and the insured:

1.       In case the copayment percentage is too high, Health Insurance policy buyers may be deterred by the high costs they will have to bear as a result of the copayment, thereby rendering the insurance policy completely useless. The need to pay a high amount even after taking up Health Insurance defeats the whole purpose of buying Health Insurance. Hence, many people who cannot afford basic healthcare would be at a huge disadvantage as they will be paying premiums for absolutely no reason.

2.       Generally, Health Insurance policies with copay are less likely to be bought. Buyers who understand the concept of copayment prefer to choose a Health Insurance policy which does not have such clauses. Similarly, an insurer who offers to pay for the entire health care treatments will have higher sales simply due to that fact.

3.       While a higher percentage of copayment ultimately lowers the premium, it is only beneficial for you (policyholder) as long as you don’t need to cash in your insurance policy. However, in case you need to claim a high amount of medical expenses, the money you saved on premiums will have to be paid towards the treatment expenses anyway.
 

FAQs 

1. What is copay in Health Insurance?

Copay Health Insurance is a type of insurance wherein a certain percentage of the total healthcare expenses needs to be borne by the insured person while the insurer covers the major portion. To simplify, the copay definition says that it is a setting in which part payment is made by the policy holder while part payment is made by the insurance provider.

2. Why should I opt for copay under my Bajaj Health Insurance?

By opting for a copayment health insurance policy, you can reduce the burden of large premium payments and secure your policy at cheaper rates.

3. Why are insurance policies with copay cheaper?

Copay Health Insurance policies are cheaper as the liability and risk of paying off a claim is divided between both the insurance provider and the policyholder.

4. Should I take a policy with copay?

Before opting for a copay in insurance, you must consider factors such as your past medical history as well as your current state of health. If you are healthy and maintain an active lifestyle with diet and exercise and feel that you may not need to make a Health Insurance claim anytime soon, taking a copay Health Insurance is a good option. On the other hand, if you are susceptible to certain medical conditions or lead an unhealthy lifestyle, it is better to opt for a regular Health Insurance policy.

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