Considering the ever-increasing cost of healthcare facilities in India, it is fair to say that having health insurance is a sensible financial decision. However, one of the common things that most individuals struggle with is choosing a suitable cost-sharing component in a health insurance plan.
Both copays and deductibles help policyholders to finance their healthcare expenses without exhausting their entire savings. In order to pick the suitable option for yourself, you must be aware of all the aspects each of them consists of.
Brief description of copay and deductible in health insurance
When you opt for co-payment, you will have to pay a specific percentage of the total claim amount after getting healthcare services. This percentage will be decided while availing of the insurance plan. Apart from that specific percentage of the total claim amount that you as a policyholder need to bear, the insurance provider should cover the remaining amount.
Here is an example to help you understand the concept better:
A person with a health insurance plan decides to opt for the copay facility and agrees to bear 10% of the total claim amount. After availing of health care services, the claim amount the policyholder has been approved for is Rs.5 lakh. In that case, the person will have to shell out Rs.50,000 from his/her own pocket. The remaining Rs.4.5 lakh will be covered by the insurance provider.
On the other hand, when you avail a deductible in a health insurance policy, you agree to pay a fixed amount of money. In that case, the insurer is liable to pay the remaining portion of the claim amount. This particular amount that you as a policyholder has to bear will be set in the beginning. Apart from that, the insurance company will decide the other terms and conditions of a policy.
Here’s an example to help you understand it:
A person applies for health insurance and goes for a deductible. After discussing with the insurer, the policyholder agrees to pay Rs.10,000 as a fixed amount before the insurance kicks in. Therefore, that individual now has a claim of Rs.2 lakh against his/her treatment-related expenses. In this case, the insurance provider will only reimburse Rs.1.9 lakh, and the remaining the policyholder has to bear.
Difference between co-payment and deductible
Now that you have a clear understanding of the meaning of these two types of components, here are some basic differences you should know:
- If you go for a larger co-payment, you have to bear a lower premium amount. On the other hand, deductibles come with certain terms and conditions in case of cost-effective premiums.
- Copays can be availed for a specific set of medical services and facilities. Deductibles are available to cover all healthcare expenses even before beginning a health plan. The implementation starts before the health insurance plan starts making a contribution to you, the policyholder’s healthcare expenses.
Both copays and deductibles come with their own set of advantages as well as limitations. Since they involve shelling out a specific portion of money from your own pocket, it is essential to pick the right option. Additionally, choosing the right health insurance policy is equally important, depending on one’s needs and medical conditions.
Several online aggregators have a wide range of health insurance plans at affordable costs available on their portals. These policies extend benefits like cashless treatment, ambulance charges, reimbursement of different pathology tests, pre and post-hospitalization charges, etc. Now, you can choose and purchase an insurance plan that meets your requirement criteria.
It is imperative that you buy a health plan nowadays due to the rise in medical expenses due to COVID-19. You may choose a copay clause or deductible basis your financial goals. But, regardless of whether you opt for copay or deductible, different insurance providers have different terms and conditions for all of them. Make sure to check the clauses associated with them beforehand to avoid unnecessary hassles during medical emergencies.