With rising health insurance premiums, opting for a co-pay is a smart option to make the cover affordable. It is especially beneficial for senior citizens as premiums are higher due to health risks and increase every two to three years based on claims.
In co-pay, the insured has to pay a part of the medical expenses, while the insurer covers the rest. For instance, if an insured opts for 20% co-payment and the hospital bill is Rs 1 lakh, he will have to pay Rs 20,000 and the insurer will pay the rest.
Higher savings
The savings in premium can be substantial. For example, the annual premium for a 60-year-old in Star Health SuperStar policy is Rs 26,332. With a 20% co-pay, he can save Rs 5,266 a year. Similarly, he can save Rs 9,305 with a 20% co-pay in Manipal Cigna Sarvah Param policy where the annual premium is Rs 46,526. As co-pay helps lower the premium, policyholders must compare premium savings against potential out-of-pocket costs.
For new customers, the co-pay percentage is fixed at the time of buying the policy. Existing policyholders can opt for it at the time of renewal. Also, some senior citizen-specific policies have in-built co-pay clauses. “This arrangement makes the premium affordable and encourages policyholders to be more mindful of their healthcare decisions, thus reducing unnecessary medical expenses,” says Bhaskar Nerurkar, head, Health Administration Team, Bajaj Allianz General Insurance.
Siddharth Singhal, Head, Health Insurance, Policybazaar.com, says a co-pay is an ideal choice for someone who may be expecting fewer claims or can afford to pay a portion of medical expenses out-of-pocket. “Choosing a co-pay at the time of renewal can help adjust the policy to meet the current financial situation of the policyholder,” he says. However, those with chronic illnesses or frequent medical needs may face higher out-of-pocket expenses.
Co-pay even suits the young and the middle-aged. Young adults may find them advantageous due to lower premiums and minimal claims, making it a favourable deal. Middle-aged adults with pre-existing conditions can benefit from predictable out-of-pocket costs for routine visits and medications. For those who have a funds to handle part of the medical costs, a co-pay option can provide comprehensive coverage at a lower premium.
Inclusions and exclusions
Typically, under a health insurance policy the items required for medical treatment are covered and others are treated as non-medical expenses to be borne by the customer. Co-payment amounts are applied on the medical treatment cost covered like doctor visits, specialist appointments, surgery or treatment charges and prescription medications. “However, certain expenses, such as pre- and post-hospitalisation costs might not fall under the co-pay clause,” says Rakesh Goyal, director, Probus, an insurance broking firm.
A few plans have specific exclusions where co-pays may not apply. Preventive services like vaccinations and screenings are covered without a co-pay. Specialised treatments like physical therapy or chemotherapy may also have alternative cost-sharing arrangements. Co-pay may not apply on certain add-ons like critical illness or daycare procedures.
Room rent limits can apply in co-pay, where the insured has to pay extra if he chooses a room that exceeds the allowed rent limit. Some co-pay plans may set limits on the total amount payable by the insurer annually or over the policy’s lifetime. Once the cap is reached, the insurehas to bear additional expenses.
When considering a co-pay, evaluate your current and expected medical needs to see if the plan fits. If frequent hospitalisation is expected, a lower co-pay percentage or no co-pay may be more cost-effective. Compare co-payment amounts for various services across different plans to find the best option for your healthcare needs and budget.