With healthcare costs on the rise, purchasing a health insurance policy with a comprehensive coverage has become a must if you want to safeguard your savings and avoid going through financial hassles in the event of a medical emergency. When you purchase a health insurance policy, your insurance provider will offer you a cover against medical expenses that you might incur in case of a hospitalisation or a medical treatment.
Based on the type of claim you raise (cashless or reimbursement), your insurance provider will either settle your medical bills directly with the hospital or reimburse you for the same. While a health insurance policy can be a great way to reduce the expenses that you may incur in the event of a hospitalisation, you will still have to pay a part of the hospitalisation bills if your policy came with a co-pay clause or if you opted for co-pay at the time of purchasing the plan.
Co-pay refers to that portion of the claim amount that is to be borne by the policyholder. While certain health insurance policies come with a mandatory co-pay clause, other health insurance plans give policyholders the option to choose a co-pay percentage as per their needs. Opting for a high co-pay will lower your premium payable, but will increase the amount that you have to pay in the event of a claim. Similarly, opting for a low co-pay will increase your premium payable, but will reduce the amount that you have to pay in the event of a claim.
Thus, for example, if you have opted for a co-pay of 10% and you raise a claim for Rs.10,000, the insurance provider will pay only 90% of the claim amount. The remaining 10% or Rs.1,000 will have to be borne by you.
Not all health insurance policies come with a mandatory co-pay clause. The co-pay clause may be applied to health insurance plans in the following manner:
Given how affordable a policy with a co-pay clause can be, it can be tempting to purchase a health insurance plan with a high co-pay percentage. However, before you purchase such a policy, make sure to understand your coverage needs and ascertain if you have the finances to pay for your part of the hospitalisation bills in case of an unplanned or planned hospitalisation.
Your policy document will have details regarding co-pay – whether or not you should pay and if you need to pay, then what the percentage is. Make sure you read the policy document at the time of purchase so that you do not miss out on such fine details.
The co-pay clause reduces the insurer’s risk of paying a large amount. Since the co-pay clause keeps the insured in check, in terms of raising claims frequently or making fraudulent claims, the health insurance company offers the policy at a cheaper price than one that does not have a co-pay clause.
No, there are many ways by which you can save on your premium such as only choosing a sum insured amount that you require, not opting for unnecessary benefits or add-ons, maintaining a claim-free year, purchasing the policy online, etc.
Most insurance companies apply the co-pay clause only for reimbursement claims to encourage policyholders to get treatments in network hospitals. The insurer usually covers the complete expenses incurred by the insured person at a network hospital.
Yes, the co-pay clause can be applied to specific benefits such as the room rent. Choosing an A/C room or a suite may attract co-pay while regular rooms will not. Also, the benefit payable for the treatment of a critical illness or domiciliary hospitalisation expenses may require the policyholder to share the expenses incurred.