Whether you are taking a health insurance policy for the first time or renewing one, it is very important to read the terms and conditions. That is to avoid being caught by surprise, when you want to claim your insurance benefits. One term that can be confusing is co-payment. Have you had ever asked yourself “what is co-payment in health insurance in India?”
If so, that’s exactly what this blog explains. We have broken down the concept for you. We have also mentioned how co-pays apply under the group health insurance with your Onsurity Plus membership if you are subscribed to the healthcare plan (here’s a hint: they don’t).
What Does Co-payment In Health Insurance Mean?
In some health insurance policies, your insurance company will pay the full cost of your medical bills apart from the medically excluded items, a list for which you can find in your health insurance policy. If you have co-payment in the health insurance clause, that is not the case. If there is a copay clause, you will have to pay a certain portion of the bills from your own pocket.
Remember, this is only a part of the total insurance claimable bill, like 10% or 20%. Sometimes that cost is a percentage, and at other times it is a fixed amount. Your insurer will still pay for most of the cost, but there is a small portion that you must pay.
Let us assume, for example, your hospitalization costs ₹50,000, and your health insurance policy has a copay clause of ₹5,000. In that case, you will have to pay ₹5,000 from your pocket, the remaining ₹45,000 will be paid by the insurer.
If a policy has copay applicable then it applies to all costs covered by the insurer. That means you will still have to pay out of your pocket for other related costs like medication, outpatient department expenses and the like that are not covered by your health insurance policy.
It is good to know that there is also a term called co-insurance, which is slightly different. Co-insurance refers to the percentage of treatment costs you must pay, after deductibles. Like the copay provision, it is often a small percentage like 10% or 20%. Co-insurance can also refer to different insurers sharing the risk amongst themselves. That’s why it is wise to know the difference.
Why Does Co-payment In Insurance Exist?
If you are already paying a huge amount as a premium for your insurance, you must be wondering why co-pays exist. There are three major reasons:
- Discourage unnecessary claims
- Discourage treatment at expensive hospitals
- Encourage honest use of policy
In the end, it all comes down to finances. For insurance companies, even saving 10% per individual will add up to a lot over the year. It helps maintain their profitability while ensuring that the right people get paid for the right expenses.
Read the complete story at: Co-payment in Insurance
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Originally Published at blog.onsurity.com/copayment-in-health-insurance-explained/
