Image default

Understanding Co-Pay In Health Insurance

What Does Co-payment Mean in Health Insurance?

Co-payment regarding Health Insurance refers to the percentage of the claim amount the policyholder is responsible for paying.

Few insurance policies require co-payment, although some enable voluntary co-payment to lower premiums.

Health insurance policies typically include two claim types:

  • Option for treatment without payment.
  • Reimbursement of the incurred expenses.

With cashless treatment, your insurance company may settle your medical bills directly with the facility where you or a family member receives care. In contrast, if you file a reimbursement claim, the insurance company may reimburse you for the costs incurred during treatment.*

Now, co-payment can result in two distinct circumstances:

A higher co-payment lowers your premium but increases your claim payment. If you choose a lesser co-payment, your claim costs could be lower, but your insurance premium could increase.

What Kinds of Co-pay Clauses Does Health Insurance Contain?

Now that we understand what a co-pay is in a health insurance plan, let us examine its varieties.

Not all health insurance policies include co-payment requirements. However, if your medical coverage contains this provision, it can be utilised as outlined below:

Co-pay Variations and Their Applicability:

  • On Medical Coverage

This category applies the co-payment provision to all claims, voluntary or required. You must pay part of the claim.

  • Regarding Senior Policies

These are the policies with mandatory co-payment provisions. This may be primarily because treatment costs for seniors can be significantly higher.

  • For Claims & Treatment at Non-Network Hospitals

Co-payments may apply exclusively to reimbursement claims or non-network hospital services. Insurance companies must pay cashless claims.

  • For Hospitalisation in Major Urban Centres

Since treatment costs in metropolitan cities may be higher than in smaller cities, insurance companies may impose a co-payment clause in such cases.

Characteristics of the Co-pay Health Insurance Plan

Under this system, the medical coverage company covers most of your claim while you are responsible for some costs. The co-payment percentage varies depending on the medical service received.

If you choose a lower co-payment, you must pay higher premiums for your health insurance policy. When it comes to the definition of “co-pay health insurance,” it can be interchangeable with co-insurance. Most health insurance policies for senior citizens include co-payment provisions. These may be more prevalent in metropolitan areas where treatment costs may be higher than in smaller villages and cities.*

The Co-pay Clause’s Positives and Negatives


  • The co-insurance provision lowers insurance premiums. Even if you must pay part of your claim, it can lower your premium, cutting your monthly expenses.*


  • High co-payments can prohibit policyholders from getting necessary medical care, rendering the policy inefficient—co-payment can be disadvantageous for the insured since they can avail of benefits only after paying a particular sum.*
  • Even if a greater co-payment lowers premiums, you may spend more for care.*

In conclusion, although plans with co-payment options may seem better, they do little to reduce your financial obligations in a medical emergency. To find out which is the best health insurance for you, check online.

Subscribe to Bajaj Allianz General Insurance YouTube Channel here!

* Standard T&C Apply

Insurance is the subject matter of solicitation.’ For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

Related posts

What Requires Extensive Use of N95 Mask Respirators

Ann Ellison

The ultimate guide to building your small business

Ann Ellison

The Dynamic Roles of brand name Specialists

Ann Ellison