Health risks are increasing everywhere, the reason being the sedentary lifestyle that people are living today. Due to the busy lives that we live, we are becoming more and more prone to health issues like diabetes, heart attack, strokes, cancer etc. majority of the population in India is poor and hence they can’t afford to bear the expenses for such health problems. Nobody wants to bear the burden of all the medical expenses that are incurred on them.
To solve this problem, the concept of health insurance into action. It ensures that all your medical expenses are paid by the insurer himself in case if something happens to you. There is a clause under health insurance policies, called co-pay. If you want to know the copay meaning, it is that some portion of medical expenses will be paid by the policyholder himself, while the remaining ones will be paid by the insurer. This clause ensures that you remain worry-free about paying all your medical expenses by yourself.
What does exactly copay mean in health insurance?
According to American medical insurance laws, a copay in health insurance is the amount that the insured person must pay from the claim amount under a health insurance policy. However, the rest will be covered by the insurer.
It refers to a claim amount that the insurer and the insured share based on their respective percentages. Copayment clauses, together with percentages, are always mentioned in the policy for medical services.
The percentage may change with the amount of health insurance that you have taken, so it can be 10% or 15% varying from one policy provider to you the other
A practical example of Copay:
There is a boy named Rahul, he bought a health insurance policy and agreed to pay 10% of the expense. His approved claim is for Rs.5 lakhs; thus, he has to pay 10% of 5 lakh, meaning Rs.50000, as copayment and the rest 90% (4,50,000) will be covered by the insurance company.
What was the need of adding a Copay clause in the health insurance policy?
The inclusion of copay clauses in policies not only saves the health insurance company some expenses but also confers certain advantages according to the following:
- To pay claims for serious issues only: Essentially, policyholders must pay some portion of the fee; consequently, they are discouraged from claiming common illnesses like colds, gastric discomfort, etc., which could technically be billed by the insurer.
- Sense of ownership: Having to pay a portion of the treatment will allow users to be aware of the additional expenditures they will face, which will foster allow them to be more focused on their health.
- To discourage people from going to expensive hospitals: People are discouraged from getting treatment at more expensive hospitals since they will be responsible for paying for the expensive services and no insurance company wants to spend so much on paying the expenses.
- Risks of insurance companies are mitigated: It reduces the risk for insurance companies since they are prone to huge profits and losses. Offering a 10% copay clause significantly reduces the company’s risk and helps stabilize its profits in the long run.
How is copay important for health insurance?
There is a lot of confusing terminology in the world of insurance, so you need to be acquainted with different terms to take full advantage of your policy. There are several reasons why people should choose copay. Following are the reasons for choosing copay clause in your health insurance:
- Risk division: When you take the copay clause, the risk associated with the health insurance policy is divided between the insured and insurer as the insured needs to pay a certain percentage of the total amount of medical expenses.
- Large premium payments eliminated: Since the insured himself is asked to pay a certain amount of fixed expenses, therefore he doesn’t need to pay a large amount of premium on the health insurance policy.
- Suitable for senior citizens: A copayment clause enables senior citizens with preexisting conditions to get adequate coverage for a lower premium because the majority of the old population cannot afford to pay all their medical expenses by themselves.
- Reduces misuse of health insurance policy:Once a person knows that he needs to pay some amount of his medical expenses by himself and only then rest of the expenses will be paid by the insurer, he always respects the insurance policy and doesn’t take the risk of violating it or misusing it in any way.
So if you are looking for the best health insurance policy provider, you can associate yourself with Care Insurance as they are one of the most renowned & acknowledged health insurance providers on the internet. Their customer service is the best as they cater to every need of yours & ensure that you are happy & satisfied.