With rising health insurance premiums, opting for a co-pay is a smart option to make the cover affordable. It is especially beneficial for senior citizens as premiums are higher due to health risks and increase every two to three years based on claims.
In co-pay, the insured has to pay a part of the medical expenses, while the insurer covers the rest. For instance, if an insured opts for 20% co-payment and the hospital bill is Rs 1 lakh, he will have to pay Rs 20,000 and the insurer will pay the rest.
The savings in premium can be substantial. For example, the annual premium for a 60-year-old in Star Health SuperStar policy is Rs 26,332. With a 20% co-pay, he can save Rs 5,266 a year. Similarly, he can save Rs 9,305 with a 20% co-pay in Manipal Cigna Sarvah Param policy where the annual premium is Rs 46,526. As co-pay helps lower the premium, policyholders must compare premium savings against potential out-of-pocket costs.
For new customers, the co-pay percentage is fixed at the time of buying the policy. Existing policyholders can opt for it at the time of renewal. Also, some senior citizen-specific policies have in-built co-pay clauses. “This arrangement makes the premium affordable and encourages policyholders to be more mindful of their healthcare decisions, thus reducing unnecessary medical expenses,” says Bhaskar Nerurkar, head, Health Administration Team, Bajaj Allianz General Insurance.
Siddharth Singhal, Head, Health Insurance, Policybazaar.com, says a co-pay is an ideal choice for someone who may be expecting fewer claims or can afford to pay a portion of medical expenses out-of-pocket. “Choosing a co-pay at the time of renewal can help adjust the policy to meet the current financial situation of the policyholder,” he says. However, those with chronic illnesses or frequent medical needs may face higher out-of-pocket expenses.
