Copayment in Health Insurance

In health insurance, the copayment is the amount that the insured has to pay from his own pocket at the hospital. In simple terms, it is a contract between the insurance company and the person insured, as per which in case of any medical emergency of the insured, the company bears most of the medical expenses incurred and a small percentage has to be paid by the insured.

The copayment percentage usually ranges between 10-30% of the total claim amount. If you have health insurance for the whole family and especially if your parents are included in it, then the copayment can be higher. Once you have paid the copayment amount during the hospitalization, your insurance company settles the bill by paying the balance amount.

Copayment is mandatory in some insurance companies, whereas in other companies, you can opt for copay if you wish, leading to a reduction in the premium you have to pay.

(Read more: Cashless health insurance)

The inclusion of copayment feature in health insurance not only helps insurers save expenses but also has many benefits including:

• Since the insured will have to pay some percentage of the claim amount, they do not make a claim for common health problems.
• Some part of the medical bills will have to be paid on their own and for this reason, the insured will be more mindful about their expenses and try to spend as little as possible.
• The insured will try to avoid going to more expensive hospitals for treatment, as they have to pay some part of the bill. 
• The copayment feature reduces the risk for the insurance companies. If 10% of the copayment has to be paid by the insurer, it means that the company is saving 10% of the total amount.

(Read more: Health insurance plans for family)

Insurers impose the terms of payment depending on different situations. Following are some of the main situations in which the copayment is invoked:

• Senior citizen copayment: Most of the companies in India apply age-wise copayment. If you have taken a health insurance plan for the whole family and senior citizens are also included in it, then the condition of copayment can be applied. This is usually done because the health of senior citizens deteriorates with age and imposing this condition can help companies avoid loss.
• Hospital-wise copayment: Some insurance companies impose a copayment condition when the insured seeks treatment at an out-of-network hospital. Out-of-network hospitals are those that are not associated with the insurer.
• Area-wise copayment: Depending on the area in which the insurer resides, the condition of copayment may also be imposed. For example, if a person lives in a village or a small town, then his medical expenses are less, so the company may not put the condition of copayment. Conversely, if the person resides in a metro city, the insurer may impose a condition of copayment to control the expenses. Also, if a person lives in a small city and he gets treatment in a metro city hospital, then the condition of copayment can be placed in front of him.
• Sickness-wise payment: If a person already has a disease and buys a health insurance plan, then the insurer can apply the condition of co-pay. Apart from this, if the person has any serious disease, then the copayment can also be applied. This is usually done because the medical expenses involved in these diseases can be extremely high.

(Read more: What is critical illness insurance)

The terms and conditions written on health insurance documents can seem confusing but it is important to understand them well to choose the right health insurance plan for you. We’ve gone over what copayment is and how it works. Here is why copayment is important:

• It divides the risk involved between the insurer and the insured. This is usually done to keep the situation balanced and so that the company can continue to offer health insurance plans.
• Opting for copayment can help reduce high premiums; however, this depends on the norms of the company.
• Senior citizens who have pre-existing diseases get more coverage at lower premiums with the help of copayment.
• Due to copayment, the insured does not seek luxury facilities or make unnecessary use of hospital facilities. As the insured has to pay a part of the total amount of medical expenses themselves, they claim only what they require.
• It also reduces the misuse of health insurance policies.

(Read more: Best cashless mediclaim policy)

In this day and age, health insurance has become mandatory for everyone. But when buying a health insurance policy, keep the following things regarding copayment in mind:

• Percentage of copayment: This is the amount that the insured has to pay. For example, if a bill of Rs 1,00,000 is generated following a medical emergency and the copayment is 10%, then the insured will have to pay Rs 10,000 out of their own pocket. After this, the insurance company will pay the remaining Rs 90,000.
• Premium: In most insurance companies that have a copayment condition, the premiums are usually very low. You can compare co-paid health insurance with any other health insurance policy to ensure the difference in premium when making your decision.

(Read more: What does health insurance cover)

If you buy the myUpchar Bima Plus plan, you need not worry about the copayment as we try to take full care of your financial situation. If you are a holder of myUpchar Insurance Plus and you have an unexpected medical emergency, you can get cashless treatment at any hospital in our network without worrying about money. If you get treated in a non-network hospital, you will have to pay the bill in the hospital yourself, but you can claim reimbursement for it later.

However, you are still advised to go through all the documents related to your health insurance once. This is because, in certain situations, insurance companies may have to include a payment condition.

(Read More: Personal accident insurance)