In recent years, the skyrocketing cost of the healthcare sector has made it almost impossible for the middle-income group of the country to avail the right medical facilities at affordable rates. Even though many developments have been made in the healthcare sector, affordable medical treatment is still a miss from the overall infrastructure of the country.
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Thus, in this day and age, having a health insurance policy is a necessity more than a choice. The right health insurance policy ensures that you are protected against the financial burden that may occur due to sudden medical emergencies.
Further in this article, we will briefly discuss the concept of copay in health insurance and its advantages and disadvantages.
Copay in health insurance is defined as the percentage of the claim amount that the policyholder bears under a health insurance policy. Some health insurance providers come with a compulsory clause of copayment while other insurers provide the option of voluntary copayment to the policyholder, which allows them to reduce their cost of premium payment.
Generally, in health insurance policies an individual can opt for two types of claims:
For example, if the policyholder has chosen a copy of 15%, the insurer will bear 85% of the claim amount, whereas the rest of the amount will have to be borne by the policyholder.
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Let’s take a look at the features of the co-pay to understand it in detail.
The following are some of the advantages and disadvantages of copayment in health insurance.
A higher % of co-payment means a lower premium for the policyholder. Even if a policyholder has to pay a higher amount during the claim, it can be beneficial as it lowers the periodic expenses by reducing the premium payment.
The insurers who demands a high copayment amount from the policyholder can stop them to avail proper health care during any medical emergency. The disadvantage of copayment is that cannot avail adequate healthcare from the insurance policy without paying a share for the same.
With co-payment, the unnecessary claims go down as the policyholder will not like to file a claim for every small medical treatment they undertake. Since the policyholder knows that he/she will have to bear a portion of the cost they will only opt for the necessary treatment.
Although a higher co-pay amount means less premium, the policyholder will eventuality end up paying more towards the expenses of the treatment rather than saving on premium amount.
Co-payment in health insurance works best for insurance buyers who are young and are less prone to diseases or the probability of them getting hospitalized in very low. This means that the policyholder will have to pay a lower premium. However, senior citizens who suffer from any type of critical illnesses or other diseases should not consider the option of co-payment as it may prove to be very costly for them.
Health insurance policies are specifically designed to provide medical assistance to the insurance buyers and help them to save on the medical expenses that may occur due to any emergency. With the co-pay option, the policyholder agrees to share the risks of the insurer in return for low premiums. The insurance buyers should decide to choose the co-payment only if he/she is convinced that the benefits balance the risk related to this clause.
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