What is co payment in health insurance policy

 

In health insurance claims many times we encountered problems of deduction of certain percentage of claim and insurance company named it as Co-pay deduction. It means that even someone is covered under health insurance still he must bear some portion of claim amount. On the one side it can have burden on your pocket at time of claim, on the other side it may be pocket friendly while we are depositing insurance premium.

The proportion of medical expenses shared between the insured person and the insurer is called the co-payment of health insurance. In other words, it is a cost-sharing mechanism in which the policyholder bears part of the medical expenses and the rest is borne by the insurance company.

Health insurance policies often include co-pay designed to help reduce your overall medical costs. The insurance company can charge a lower premium than if the policyholder were to pay all medical expenses out-of-pocket.

You pay for many medical services, such as doctor visits, hospital stays, laboratory tests, and prescription drugs from out-of-pocket. The co-payment amount vary depending on the insurance company.
For example, health insurance may impose a 20% co-pay on him for room rent cost. This means that the policyholder will cover his 20% of the room rent costs and the insurance company will cover the remaining 80%. If the room rent costs Rs.100, the policyholder will pay Rs.20 and the insurance company will pay him Rs.80.
Co-pay also help encourage policyholders to think more carefully about their medical costs. When policyholders have to pay a portion of their medical costs, they are more likely to choose cheaper treatments and avoid unnecessary medical procedures.

 However, for some policyholders, out-of-pocket costs can also have a negative impact. For example, people with pre-existing medical conditions or high medical costs, out-of-pocket costs can be a financial burden.

When policyholders need frequent or expensive treatments, out-of-pocket costs can quickly add up, making it difficult to finance medical expenses.
In addition, co-payments may discourage policyholders from seeking necessary medical care. If policyholders must bear a significant portion of medical costs, they may delay or avoid necessary medical procedures to avoid financial burden.  

In conclusion it is important to choose Co payment clause carefully while taking health insurance.