What is co-payment in health insurance?

Health insurance is a type of insurance in which a policyholder gets some benefits for medical expenses that arise from an illness. Health insurance does not cover all medical expenses of an individual. Health insurance companies pay a large portion of one’s medical expenses but some amount of the money might have to be paid by the policyholder.

In health insurance, co-payment refers to a portion of money which is to be paid by the policyholder in case of a claim. Health insurance companies offer co-payments in amount and percentage form of money. The percentage of copayment varies in insurance from 10% to 30%.

Companies offer copayment mostly under senior citizen health insurance policies because beyond the age of 60, an individual needs more medical emergencies. Copayment also maintains the limit on the bills because a policyholder pays a fixed amount of the bill.

Practical Example of Co-payment

In a disease condition, you have to admit to the hospital and you have Rs. 5 lakh health insurance with a 20% copayment. You get the 5 lakh rupees bill. In the copayment option, insurance company will not pay your all medical expenses. It will divide expenses into a 20:80 ratio. The company will pay 80% of the total bill and 20% amount you will have to pay directly from your pocket. So here, you will pay Rs.1 lakh from your pocket, and Rs. 4 lakh will be paid by the health insurance company.

Conclusion

A health insurance advisor suggests that you should never go for a copayment plan until and unless you don’t have any other choice. In old age, if you have problems like blood pressure and sugar, etc., company might not offer a comprehensive insurance plan. In this case, you should choose the copayment with health insurance.

Thanks for reading this article. Hope you found it very insightful and eye opener.

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