What is Co-pay in health insurance policy ?

What is Co-pay in health insurance policy ?

Following the diktat from finance ministry to cut  losses, the public sector general insurance companies — New India, United India, National Insurance and Oriental Insurance– are likely to introduce co-pay ratio in all new group policies sold by them.

In simple terms, co-payment refers to the part of the eligible claim that a policyholder has to pay for, with the insurance company taking care of the balance amount. Typically, this ratio ranges from 10-25%. That is, for every claim of Rs 100 made, the policyholder has to shell out Rs 25 from her pocket, before the company contributes Rs 75.

Insurers employ this tool to discourage policyholders from availing of treatment which they would have avoided in the absence of the health cover. Similarly, it also keeps policyholders from opting for high-end hospitals.

However, the presence of co-pay clause in your policy does not necessarily imply that all your claims will be subject to the same. It could be triggered only in case of certain conditions. It can also come into play if the insured undergoes treatment in certain metropolitan cities despite paying premiums applicable to smaller cities.

Likewise, choosing healthcare facilities that are not part of the insurer's network of hospitals could necessitate co-payment by the insured. However, most senior citizen health covers include this clause in their terms, and it is typically applicable to all claims made.

Given the monetary implications of this clause, it would make immense sense to study your policy's terms and conditions closely before signing up for a new cover or renewing the existing one.