All you need to know about co-payment in health insurance plans

While health insurance plans offer support during medical emergencies, they may not cover your entire hospital bill. For instance, if you incur a medical bill of Rs. 1 Lakh, your medical insurance policy will cover a major part of the bill, but not the entirety of it. This is why it is essential for customers to get a better understanding of deductibles and co-payments involved with a health insurance policy.

What are co-payments?

Co-payments refer to the percentage of the treatment cost that the policyholder must bear while filing for a claim from the insurance company. Co-payments are divided into compulsory and voluntary. Compulsory co-payment is the fixed rate decided by the insurance provider and is irrevocable once you purchase the health insurance plan.

On the other hand, voluntary co-payment refers to the payment in which you set the percentage. With a higher voluntary co-payment portion, the policyholder can reduce the price of the plan. However, he will need to pay more out of his own pocket during a medical emergency if the voluntary co-payment value is high.

What is the difference between co-pay and deductibles?

Co-pay refers to the percentage of the claim that the insured needs to pay out of their own pocket. However, deductibles refer to a fixed amount and not a percentage of the entire claim.

Features and importance of co-payments

Apart from reducing the cost of health insurance policies, co-payments have certain distinct features and advantages.

·         Insurance providers use the co-payment method to discourage policyholders from seeking treatment, just because the policy covers that particular procedure. Co-payment ensures that the insured only seeks treatment when it is necessary and vital for their well-being.

·         Not all claims made will include co-payments and the insurance company decides when to levy the same.

·         The co-payment may be levied more in case of claims made by senior-citizens since chances are that such claims would be higher due to the high-risk in the case of older people.

While co-pay does result in greater liability to the policyholder during a claim, it is also a valid way of reducing health insurance premiums. In fact, if you want to get the best policies at an affordable rate, you should choose higher voluntary co-pay, to ensure comprehensive coverage during medical emergencies.