Understanding Co-Pay Clause In Health Insurance

The present pandemic has made individuals aware of the importance of health insurance. There has been increasing in the purchase of health insurance and personal accident covers. However, i9t is important to educate oneself about the terms and conditions too. Each policy defines the exclusions and caps, but as a buyer, you must be aware of the co-pay and deductibles clause while purchasing insurance. 

Under the co-pay clause, the policyholder has to pay a portion of the claim. The c0-pay amount is fixed and is expressed in percentage. For example, if you have purchased an insurance policy worth Rs 3 lakh, and if the co-pay clause demands 15%, then you are expected to pay Rs 45,000 while the rest is paid by the insurance company. Most of the companies usually have a co-pay clause of 10%. This is more evident in a senior citizen mediclaim policy. 

What are the features of co-pay health insurance? Co-pay is the percentage of the total that the insured has to pay while raising a claim A part of the expenses say 10%, is taken care of by the insured while the rest is taken care of by the insurance company Co-pay and Co-insurance mean the same thing If you opt for a larger co-pay percentage then you may have to pay a lower premium for your policy Co-pay clause is usually applicable in major cities and senior citizen policies.

Check with your company if it applies co-pay to all hospitals or only non-network hospitals. Some companies might even apply a co-pay clause for the hospitals that are located outside the city or state. Many insurance companies define various cities according to the zones. If you are paying zone B premium and if you avail of the treatment in a Zone A city, you may have to co-pay a certain percentage. However, this clause does not apply to accidents. 

Why do insurance companies insist on a co-pay clause? 

Many people file unnecessary claims. In order to discourage people from filing unnecessary claims, the insurance company might insist on a co-pay clause. Another reason for the co-pay clause is to discourage people from availing the treatment in costly hospitals. For example, boutique hospitals, high-class medical centers, and specialty centres might charge around 30% more than the regular hospital for the same treatment. 

The co-pay clause ensures the judicious use of the health insurance policy. Since the insured has to pay a certain percentage from his pocket, he will refrain from misusing the health policy. The co-pay clause also reduces the risk for the insures thus benefiting both parties.

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