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What is Copay in Health Insurance in India

Copay in health insurance refers to the fixed amount you pay for a specific medical service or medication. It's a cost-sharing mechanism between you and your insurer.

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Over the past few years, the health care costs have been on an upward trajectory. This makes access to good treatment at affordable costs challenging, especially for the mid-income and lower-income groups. But thanks to unique health insurance plans, things are getting simpler. There’s no denying that owning a health insurance policy is pivotal. However, before jumping on the idea of health insurance, you should also understand the jargons involved to read the policy document in a better fashion. And one such fundamental terminology is copay in health insurance.

Copay Meaning & Definition
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There are many complicated definitions out there! But, in simple language, copay, also referred to as coinsurance in health insurance means the percentage of the admissible claim amount that you need to bear during claim settlement. Hence, you need to check the copay clause to understand how much you need to contribute during claim settlement and avoid unpleasant surprises. 

What is Copay in Health Insurance?
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Consider this scenario - You buy a health insurance policy, with the most common belief that the insurance company will cover 100% of the bill amount - all fine till here. Unfortunately, you get hospitalised, and the bill comes to Rs. 10 lakhs. You raise a claim to inform your insurer about the bill. But then something unexpected happens. Your insurer tells you that they will pay only 95% of the bill amount, and you need to pay the remaining 5%. That comes to Rs. 50,000. Not a small amount, right? You get astonished and question the insurer. They tell you - it’s a copay clause as mentioned in the policy document. You wonder when did you sign up for this. Well, such cases are not rare, and to avoid such uncomfortable scenarios, it’s important to learn the concept of copay in health insurance. 

How does co-pay work? 
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Co-pay is a term you'll often come across when dealing with health insurance policies. It's a way for insurance companies and policyholders to share the cost of healthcare expenses. Let me break it down for you in a friendly and conversational manner.

The purpose of co-pay is to encourage policyholders to be more involved in their healthcare decisions and to discourage unnecessary or frivolous medical expenses. It also helps to keep insurance premiums lower since the policyholder shares a portion of the cost.

It's important to note that co-payment in medical billing applies to specific services or treatments mentioned in your health insurance policy. It might vary for different types of medical services. For example, you might have a different co-pay percentage for hospitalisation, diagnostic tests, or specialist consultations.

Co-pay is generally indicated in terms of a percentage, but it can also be a fixed amount depending on your policy. It's crucial to thoroughly read your policy document to understand the co-pay terms and conditions, as they can vary from one insurance provider to another.

Additionally, co-pay is different from deductibles. Deductibles refer to the initial amount you need to pay before the insurance coverage kicks in, whereas copay in medical billing is the percentage or fixed amount you contribute to each medical expense.

Keep in mind that co-pay is not applicable to all health insurance policies. Some policies might offer a "no co-pay" feature, where you don't have to pay any portion of the expenses out of your pocket. It ultimately depends on the type of policy you choose and the terms and conditions set by the insurance provider.

Example of co-pay in health insurance
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So, imagine you have a health insurance policy with a co-pay in medical billing of 20%. This means that when you receive medical treatment or have a doctor's visit, you'll have to pay 20% of the expenses out of your own pocket, while the insurance company will cover the remaining 80%. Let's say your doctor's visit costs Rs. 1,000. With a 20% co-pay, you'll have to pay Rs. 200, and the insurance company will take care of the remaining Rs. 800.

Benefits & Features 
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  1. Financial Protection: Health insurance provides you with financial protection against unexpected medical expenses. It helps you cover the costs of hospitalisation, medical treatments, surgeries, medications, and more. By having health insurance, you can avoid the burden of hefty medical bills that can sometimes put a strain on your finances.

  2. Cashless Hospitalisation: Numerous health insurance policies provide the benefit of cashless hospitalisation, which offers convenience to policyholders. With this feature, if you are admitted to a hospital within the network, there is no need for you to make upfront payments for medical expenses. Instead, the insurance company directly handles the settlement of bills with the hospital, in accordance with the terms and limits specified in the policy. This arrangement alleviates the need for arranging immediate funds during emergencies, providing financial relief to the insured individuals.

  3. Pre and Post Hospitalisation Coverage: Health insurance policies often provide coverage not only for hospitalisation expenses but also for pre and post hospitalisation costs. This includes expenses related to doctor consultations, diagnostic tests, medications, and follow-up treatments that are necessary before and after your hospital stay.

  4. Daycare Procedures: Some health insurance plans cover certain day care procedures where hospitalisation is not required for 24 hours or more. These procedures include chemotherapy, dialysis, cataract surgery, and more. Having coverage for daycare procedures ensures that you receive financial assistance for necessary medical treatments without having to be admitted to the hospital.

  5. Maternity Benefits: Many health insurance policies offer maternity benefits, which cover the expenses related to pregnancy and childbirth. These benefits usually include pre and postnatal consultations, hospitalisation costs, delivery charges, and sometimes even newborn baby care. Maternity coverage is an essential feature for those planning to start or expand their families.

  6. No Claim Bonus (NCB): Health insurance policies often come with a no claim bonus feature. This means that if you don't make any claims in a policy year, your sum insured can increase at the time of renewal. NCB encourages policyholders to maintain good health and make fewer claims, while also providing a higher coverage amount over time.

  7. Wellness Benefits: Some insurance companies offer wellness programs and benefits as part of their health insurance policies. These programs may include discounts on gym memberships, health check-ups, preventive screenings, and access to telemedicine services. Wellness benefits promote a healthy lifestyle and proactive healthcare practices.

  8. Portability: Health insurance policies in India also offer portability, which means you can switch your insurance provider without losing the benefits you have accumulated. This feature allows policyholders to explore better coverage, service, and premium options without any hassle.

It's important to note that the benefits and features mentioned above can vary across different health insurance plans and providers. When choosing a policy, it's crucial to carefully read the terms and conditions, compare different options, and select the one that best suits your healthcare needs and budget.

Is Copay Compulsory?
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While a few health insurance plans come with mandatory co-payment, a few plans allow you to opt for the voluntary deductible, which reduces the premium amount. To answer this question, copay depends on the plan that you are considering buying. 

Copay Percentage

The copay percentage can vary between 5-20% and depends on the insurance company and the health insurance policy that you are opting for.

Voluntary Deductible vs. Copay - Not the Same!
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Both voluntary deductible and copay are different terms. You pay all the deductibles when you file a claim. After this, the insurance company settles the remaining amount. If the policy comes with a copay, this amount will be divided between you and your insurer as per the agreed percentage. The policy document mentions the copay percentage.

Impact of Copay on the Health Premium Amount
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The percentage amount that you share with your insurer has a direct impact on the premium amount. How? When the copay is higher, you pay a higher amount, and the insurer will have to pay a lesser amount. Hence, insurers incentivise you by decreasing the premium amount. 

High Copay Amount
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When the copay is higher, it will lead to a lower premium amount but higher out-of-pocket expenses during a claim. The logic is simple - high copay means the risk is divided between you and the insurer.

Less Copay Amount
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In case of a lesser copay amount, you will have to pay a higher premium amount each year but decrease out-of-pocket expenses during a claim. 

Types of Copay Clauses in Health Insurance
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Insurers apply copay clauses based on different scenarios as mentioned below.

In case of pre-existing diseases, critical illnesses, etc., the insurer will always levy a copay clause since treatments for such health conditions are expensive. In this case, you need to bear a part of the bill.

Hospital-Related Clause
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Insurers may levy a copay clause only on reimbursement claims. That is, when you get treated at a non-network hospital, that your insurer is not associated with. Under such cases, there are no copay clauses for cashless claims. Cashless claims are allowed only in a network hospital.

Age-Related Clause
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The higher the age, the higher the probability of medical conditions and complications. Right? The treatment expenses will also increase with age. Hence, to mitigate the risk, insurers will apply the copay condition for senior citizens. This is logical as many health insurance plans have an age limit that makes it difficult for senior citizens to buy a policy.

Location-Related Clause
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It’s no secret that the medical costs are higher in metro cities as compared to smaller towns. However, due to a higher possibility of medical expenses, insurers may put a copay clause for bigger cities to reduce the risk.

Advantages and Disadvantages of a Copay Clause
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High copay reduces periodic expenditure on the premium amount.


With a copay clause, you may end up spending more on treatment costs. This may make the health insurance policy less efficient.

Why Do Insurers Include Copay Clause in the Policy?
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Insurer's levy copay clause to help them save during claim settlement. Here are other reasons why insurers apply copay in health insurance plans. 
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Prevent Misuse of Policies
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Sometimes, policyholders may raise claims even against the treatment of diseases that do not demand high treatment costs. The copay clause will prevent misuse of insurance policies. The reason is - if policyholders raise a claim, they will also have to bear a portion of the bill. This also ensures that the health insurance policy is judiciously used. 

Rethink Expensive Treatments When Not Required
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Usually, people with a health insurance policy will opt for luxurious facilities/expensive hospitals, even when not required. Because of this, the claim amount turns out to be higher, and insurers may have to bear unnecessary costs. To eliminate this, insurers levy a copay clause to discourage policyholders from going to hospitals that can lead to higher expenses. For example, if you have a copay clause of 10%, you will think twice before opting for treatment in premium hospitals. 

Should you opt for a policy with co-pay?
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A health plan with a co-payment feature may be suitable for individuals who meet the following criteria.

  1. Budget-conscious individuals: If you are looking for a more cost-effective health insurance option, a plan with a co-payment feature can help lower your premiums. This can be beneficial if you want to save money on your monthly insurance expenses.

  2. Generally healthy individuals: If you have good overall health and do not anticipate frequent medical visits or extensive treatments, a plan with a co-payment feature could be a good fit. Since you may not require extensive medical care, the co-payment amount might not significantly impact your out-of-pocket expenses.

  3. Low-risk individuals: If you have a lower risk tolerance and are comfortable taking on a certain percentage of medical expenses, a co-payment plan can be suitable. You would pay a predetermined amount at each healthcare visit or service, while the insurance company covers the remaining portion.

  4. Individuals with access to emergency funds: If you have emergency savings or sufficient funds set aside to cover potential co-payment expenses, a plan with a co-payment feature can be a viable option. This ensures you have the means to pay your portion of the medical costs when needed.

  5. Those seeking affordable coverage: If you are searching for a health insurance plan that provides basic coverage at a more affordable price, a plan with a co-payment feature can be a good choice. The reduced premiums associated with co-payment plans can make healthcare coverage more accessible within your budget.

Things You Should Consider Before Opting for Health Insurance with Copay Clause
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Health Conditions 
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You may think you are fit and don’t have any pre-existing diseases, and hence, choosing a policy with a high copay may make perfect sense to you to save premium. But God forbid, if some unforeseen medical expenses arise, you may end up spending more on treatment costs. Hence, consider this factor before buying the policy with a high copay clause.

Coverage Requirements
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As mentioned above, plans with high copay are comparatively cheaper. However, this also means you have to bear a specified portion during the claim settlement. Therefore, just because the plan is more affordable, you should not buy it without assessing your coverage requirement. The pandemic is a reminder of the unforeseen medical expenses that can bring a lot of emotional and financial stress in one’s life.

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If you want to buy a copay health insurance plan, make sure you have adequate savings to pay for the hopitalisation bills, in case they arise.

Other Factors
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Along with copay, other factors such as claim settlement process, claim settlement ratio, value-added services, inclusions, and exclusions, need to be considered while buying a health insurance plan in India.

Note: You may have to spend a comparatively higher each year on the premium but will stay stress-free even if the claim amount turns out to be huge. Hence, we recommend you buying a zero or low copay plan to save on treatment costs.

Frequently asked questions
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Below are few of the questions about copay in health insurance:


How can I know the copay percentage in my policy?

When you buy a policy, you will get the policy document where all details are mentioned - inclusions, exclusions, copay clause, copay percentage, etc.

Should I buy a policy with or without copay?

As mentioned above, you need to consider your lifestyle, previous and current health condition, savings, probability of raising a claim, etc., before deciding. For example, if you follow a disciplinary and healthy lifestyle, you may consider buying a plan with a copay clause. This will also help you save on the premium amount. However, if you have financial resources, we recommend purchasing a plan without copay to avoid financial stress in the future.

Why policies with copay clause are cheaper?

Copay means you bear a certain portion of the admissible claim amount with your insurer. In case there is a copay clause, you are sharing this risk with your insurer. Hence, the premium is lower than compared to policies without a copay clause.

Why policies without copay are more popular even if they are expensive?

Healthcare costs are rising and even at a faster pace in metro cities. To avoid these unforeseen costs, which can make any robust financial plan go for a toss, many people prefer paying a higher premium to stay stress-free.

How does copay or copayment works?

Copay or copayment is usually an amount you need to pay at the time of claim settlement, while the insurer will pay the remaining amount. You need to pay this amount as the percentage of the sum insured amount in the policy document. The copayment clause depends on the plan that you are selecting. For example, plans for senior citizens come with a higher copayment clause. Also, some insurers may levy higher copayment in case treatment is done at non-network hospital.

How to know how much do I need to pay during claim settlement

To determine your co-payment responsibility during claim settlement, you can consult the terms and conditions outlined in your health insurance policy. The policy document will specify the exact co-payment percentage or amount that you are obligated to contribute. Alternatively, you can directly reach out to your insurance provider to obtain information about your co-payment obligations and seek clarification on how co-payment is calculated when settling claims.

Is co-pay levied on cashless hospitalisation?

Yes, you need to pay your share of the claim amount during cashless settlement as well.