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Introduction to Difference Between Copay, Deductible and Coinsurance

A lot of people avoid purchasing a mediclaim policy as the associated terms and conditions are quite complicated to understand. When stepping into the world of health insurance, you need to understand a few terms that may confuse you when making a purchase. In this article, we shall understand the various cost-sharing components of health insurance.

There are three types of cost-sharing components:

 

  • Co-payment

  • Deductible

  • Coinsurance

For cost-sharing in health insurance, you need to pay a part of your medical expense and the rest will be covered by the insurer. Though these terms may sound quite similar, there is a considerable difference between the three! They define when and how much you are supposed to pay, as well as what is left for your health insurance policy to cover.

What is Copayment in Health Insurance?

Copayment in health insurance is a set amount or percentage of the claim amount that a policyholder must cover while the rest is covered by the insurer. Under this component, you are liable to pay a fixed sum you agreed to whereas a major part of the claim is borne by the insurer.

The copayment clause is common for senior citizen health insurance plans and in metropolitan cities due to the soaring medical costs. To find out if your health plan has a copayment clause, you must read the policy documents thoroughly and understand the said terms and conditions. In case you do not find the co-payment clause in your health insurance plan, it is recommended to check with your provider.

What is Deductible in Health Insurance?

A deductible in health insurance is a fixed amount that you must pay before your health plan covers the remaining treatment cost. The terms and conditions of deductibles in health insurance are set by the insurance company. Thus, the deductible clause could be applicable per treatment or per year.

If you have the option to choose a deductible, you can take your medical history into account.

But the risks associated with health can be unpredictable and therefore, you must opt for a deductible that is financially suitable for you.

What is Coinsurance in Health Insurance?

Coinsurance is an amount that you need to pay after covering the applicable deductible sum. Such a cost-sharing component has a set percentage similar to copayment in health insurance. The coinsurance clause secures insurance providers against huge health insurance claims.

Understand Copay vs Deductible vs Coinsurance

Let’s go through the copay vs deductible vs coinsurance table through an example:

Copayment

Deductible

Coinsurance

Let’s assume the copayment applicable is 10%. If the total treatment cost is ₹15,000, then the copayment sum shall be ₹1,500. The remaining cost, ₹13,500, will be covered by the insurer.

Considering the deductible is ₹5,000, the policyholder must pay this sum before the insurance plan kicks in.

Coinsurance is applicable after the deductible has been paid. Let’s assume the coinsurance is 10% of the total claim amount. After paying the deductible of ₹5,000 from the total sum of ₹15,000, coinsurance of ₹1,000 will be applicable on the remaining amount of ₹10,000.

Copay Vs Deductible

Let us compare copayment vs deductible on the following factors:

Factors

Copayment

Deductible

Meaning

Set amount to be paid towards the treatment while the rest is covered by the insurer

Fixed sum to be paid before the health insurance plan starts covering the medical expenses

Premium

A larger copayment amount means lower premium rates

Deductibles can also lead to cost-effective premiums

Applicability

Copayment is applicable to certain medical services or facilities

A deductible is applicable before health plans begin to cover the healthcare expenses

Copay Vs Coinsurance

With the below comparative view between copayment vs coinsurance, here are some key pointers:

Factors

Copayment

Coinsurance

Meaning

Copayment is a set amount or percentage of the total medical cost.

Coinsurance is a fixed percentage to be paid from the incurred costs. Here, the amount payable may vary but the percentage to be paid remains constant.

Applicability

In the case of copayment, you need to cover a fixed sum after seeking medical service.

In the case of coinsurance, you need to make payment after covering the applicable deductible.

Payment Clause

Must be paid each time while opting for a healthcare facility.

Must be paid to the insurance provider after seeking medical care.

Deductible

Copay might count towards the deductible under some conditions.

Coinsurance should be paid after paying deductibles.

Deductible Vs Coinsurance

After learning what are copays and deductibles and how they are different, let’s look at deductible vs coinsurance:

Factors

Deductible

Coinsurance

Meaning

A deductible is a fixed sum to be paid before the insurance plan kicks in

Coinsurance is a set percentage to be paid from the total cost of treatment

Applicability

Deductible has to be paid per year but the terms may vary based on the insurer

Coinsurance amount must be paid each time you file an insurance claim

Payment Clause

Deductibles are fixed

Coinsurance is a fixed percentage, however, the amount can vary depending on the treatment cost

Drawbacks

As deductibles are paid yearly, there aren't any drawbacks even if the medical cost incurred is high

The coinsurance amount to be paid can be higher if the treatment costs incurred are high, leading to increased out-of-pocket expenses

Copayment With Deductible in Health Insurance

Copayment and deductibles are cost-sharing components in health insurance. So, what happens if you have both copayment and deductible clauses under your policy?

 

  • Your health insurance plan will cover the medical costs only if you have exhausted the deductible limit and pay the applicable deductible under your policy.

  • You must pay a set amount each time you file an insurance claim as a copayment. The insurer will then cover the remaining outstanding sum.

  • Your health insurance premium might be more affordable due to both these clauses.

Drawbacks of Health Insurance With Copay, Deductible or Coinsurance Clause

Although opting for health plans with such cost-sharing clauses may seem lucrative due to lower premiums, it can become a financial burden while seeking medical care. You shall be covering a large portion of the claims due to copayment, deductibles and coinsurance clauses.

 

Hence, it is recommended to purchase health insurance without such terms and prioritise your health without any financial worries. To ensure there are no hidden clauses, you must read the fine print.

In a Nutshell

Having a basic understanding of co-payment, deductible and coinsurance clauses is essential before you purchase a health care plan. Seeking affordable premiums should be your next concern. However, if you are looking for affordable health insurance premiums, you can get in touch with us at Bajaj MARKETS.

 

The health insurance plans available on Bajaj MARKETS allow you to benefit from features like swift claim settlements, reinstatement benefits, extensive coverage, lucrative add-on covers and more.

 

Use the health insurance calculator available on Bajaj MARKETS so that you choose a health plan that is affordable and fulfils your medical necessities. The tool will calculate the premiums based on your preferred coverage and add-ons.

Best Health Insurance Plans Available at Bajaj MARKETS

FAQs on Difference Between Copay, Deductible and Coinsurance

  • ✔️Is copayment part of deductibles in health insurance?

    Copayment might count towards the deductibles in health insurance. But this may differ from insurer to insurer.

  • ✔️Between copayment vs deductible, which is better?

    Both lead to out-of-pocket expenses, increasing the financial burden on you while seeking healthcare services. Thus, it is advised to opt for health plans without such clauses.

  • ✔️Does the copayment amount differ from one insurance company to another?

    Yes, the copayment amount varies from one insurer to another.

  • ✔️Do you have to meet your deductible before the copay?

    Yes. Usually, you have to pay the applicable deductible before paying the copayment amount.

  • ✔️How can I buy health insurance online on Bajaj MARKETS?

    You can head over to the ‘Health Insurance’ section on our platform or use our insurance app for ease to buy a health plan!

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