Save tax up to ₹75,000~ u/s 80D
Save tax up to ₹75,000~ u/s 80D
The copay in health insurance is the fixed percentage of the amount a policyholder pays out-of-pocket towards hospitalisation expenses, and the insurer pays the rest in every claim. This comprehensive guide explains this feature in more detail.
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Fraudulent claims cost the health insurance sector a lot of money each year. According to a study conducted by EY (consultancy firm) on financial crime in India, there has been an alarming rise of 30% in insurance fraud since 2018. It’s not only affecting the insurance sector but also impacting customers. Thus, to curtail claims fraud, copayment came into existence. Most health insurance providers offer health insurance with a copay clause. Let’s understand the term better.
A copay in health insurance is the percentage of the claim amount that an insured person bears in every claim under a health insurance policy. However, the insurer will pay the rest of the amount for that claim raised by the policyholder. . Therefore, according to the respective percentages, it is an admissible claim amount that the insurer and insured pay on a sharing basis. The copay clause and percentage are always mentioned in the insurance policy and apply to medical services.
Example:
Nidima bought the best health insurance policies and agreed to a 10% copayment. She has an approved claim of Rs.1.5 lakh. In this case, she has to bear 10% of 1.5 lakh, i.e. Rs.15000, as a copayment, and the insurer will pay the rest, 90%. Nidima has to bear the copay amount for every claim she raises with the company. .
Thus, a copay in health insurance is an arrangement made with the health insurance company, in which the insured pays a part of the medical expenses on their own. The insurance company pays the remainder.
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Including copay clauses in policies helps health insurance companies save a portion of expenses and gives the company certain advantages, as outlined below.
Understanding the concept of copay in health insurance will help you to know the reason behind this clause and how much you have to contribute to your medical bills. Let’s talk about its essential features:
Also Read: Copayment vs Co-Insurance vs Deductible
Here are some of the factors that you must consider when you go for a policy with copay:
In India, the terms copay insurance and co-insurance are used interchangeably. Both are cost-sharing in a health insurance plan, but co-insurance is a percentage of the total cost of a healthcare service that you pay after you’ve met your deductible. On the other hand, a copay is a fixed amount you pay for a healthcare service.
If you happen to have a copay clause, it can directly impact your premium. If you have a high copay with a deductible amount, your insurance premium will naturally be lower because with a high copay, the risk of payment is divided almost equally between the insured and the insurer.
Suppose A selects an individual health insurance plan with the Smart Select Benefit. His premium for the first policy year is Rs 15,000.
Now, if A opts without the Smart Select Benefit and chooses to get treatment from a hospital other than those listed in the Smart Select hospitals, a 20% copayment will apply. Accordingly, the premium for the first policy year is Rs 12,750, which is 15% less than the regular premium.
>> Also Read: Health insurance premium calculator
A copay or copayment is a cost-sharing arrangement between the insured and the insurer. In this arrangement, the insured pays a fixed percentage of the medical expenses of every claim to treat a particular condition or illness.
The copay amount and percentage can vary depending on the terms and conditions of the health insurance policy. Generally, health insurance policies in India have a copay clause that ranges between 10% and 30% of the total medical expenses, with the insurer paying the remaining amount.
For example, if the total medical expenses incurred during the treatment of a particular illness amount to Rs. 1 lakh and the copay clause in the policy is 20%, then the insured will have to pay Rs. 20,000 (20% of Rs. 1 lakh), and the insurer will pay the remaining Rs. 80,000.
It is important to note that copay is not applicable for all medical expenses. Some policies may have a copay clause only for specific treatments or medical procedures. It is important to carefully read the terms and conditions of the policy to understand the copay clause and its applicability.
We cannot predict medical emergencies. They can happen to anyone at any time. With hectic work schedules, unhealthy food habits, and variable sleep patterns, the modern lifestyle has gradually taken a toll on our health. Young adults are increasingly becoming prone to various lifestyle diseases, and it is high time we take steps to safeguard our health and that of our loved ones. Medical treatments are getting expensive due to medical inflation. Thus, a health insurance plan is what you need to cover your medical bills and protect your finances from any potential impact. You can also look for tax benefits under Section 80D of the Income Tax Act.
Copay and deductibles are key features in health insurance plans, and policyholders should have a clear idea about what is copayment in health insurance, and deductibles. The deductible is a key feature in super top-up insurance plans of Care Health Insurance. Let us understand:
| Aspect | Deductible | Copay |
|---|---|---|
| Definition | A fixed amount the insured must pay before the insurer starts covering medical expenses. | A fixed percentage of every medical bill the insured must pay when availing medical services. |
| Payment Frequency | Paid once per policy period or per claim, depending on the policy terms. | Paid every time medical services are availed, as per the policy terms. |
| Example | If the deductible is Rs 10,000 and the claim is Rs 50,000, the insured pays Rs 10,000; the insurer pays Rs 40,000 | If the copay is 20%, and the medical bill is Rs 10,000, the insured pays Rs 2,000 each time. |
| Application | Applies to the total claim amount; the insurer covers expenses after the deductible is met. | Applies to each medical service or bill separately, irrespective of the total claim amount. |
| Role in Insurance | Often seen in super top-up plans, reduces premium costs by shifting initial costs to the insured. | Common in health insurance plans to share costs between the insurer and the insured. |
If the insured individual or the eldest insured person (for floater plans) is 61 (in some cases, 71) or older when taking a new policy, the policyholder must bear a mandatory copayment of 20% (or sometimes 10%). The insurer is only liable to pay the balance amount if it is under the total sum insured.
Suppose an insured person or eldest insured individual (for floater plans) reaches 61 years of age. In that case, we provide an option for the subsequent renewal to the policyholder, wherein they can choose an additional 20% copayment option. The policyholder will get a 20% discount on their premium.
There are various medical insurance plans in India, and you can select the one based on your requirements. When considering a policy, taking into account the copay clause and knowing what copayment is in health insurance and its significance will give a clear idea and help you make a better decision for your future. However, purchasing a health insurance plan without a copay clause is possible. But in that case, you have to pay a higher premium. It splits the risk and liability of claims between the insurance provider and the insured, making plans affordable. So, you need to weigh your options and consider medical insurance accordingly. Check the health insurance coverage offered by Care with a copay clause that gives you more coverage and less obligation.
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A right health insurance plan makes sure that financial crisis is not an issue during a medical emergency.
With the skyrocketing cost of healthcare in the country, opting for a good health Insurance Plan is a smart decision for the safety of the individual and family as a whole.
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Before you jump to know how Copay in health insurance works, you should know what is co-payment in health insurance. It is a minimum percentage of the claim amount that you, as a policyholder, have to bear from the total hospital bill. The hospital insurance/ TPA desk at the hospital would inform you about the amount of the Copay. However, the maximum amount will be paid by us.
Under the Copay clause in health insurance, the proportion ranges between 20-30% will be borne by the policyholder for each claim. It applies to hospitalization expenses, pre and post-hospitalization medical expenses, alternative treatment, ambulance, and domiciliary hospitalization. It will increase by 10% per claim in the policy year until the insured attains 71 years.
If the dependent parents’ age is 61 years or more, the co-payment percentage under the mediclaim policy will be 20%.
The admissible amount is the total amount of the claim to be borne by the insured person and the insurance company on a shared basis according to the copayment percentages.
Yes. Care Supreme is a comprehensive health insurance plan that allows patients to receive the covered benefits from network hospitals without paying copayments or deductibles.
If the age of an individual with health insurance or the eldest family member in case of a family floater plan is 61 years or above, s/he will be responsible for copay in health insurance of 20%. However in case of Care Freedom plan, the amount to be paid by the insured is 30%.
It is advisable to read what is Copay in medical insurance. You will get to know about your Copayment liability at the time of Claim settlement from the hospital insurance/TPA desk, and you will also receive a message on your registered mobile number.
Yes, it is levied on cashless hospitalization as well.
Yes, policies with copay clauses are cheaper because claim settlement liability divides between the health insurance provider and policyholders.
**Number of Claims Settled as of 31st March 2024
^10% discount is applicable for a 3-year policy
^^Number of Cashless Healthcare Providers till Feb 2025
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