Topic 2: Health Insurance: Co-pay should be the last option

With health insurance policies becoming costlier, individuals often opt for higher co-payment which helps to reduce the premium. While the premium may be less in such a case, the policyholder will pay more towards the treatment rather than saving on the premium amount as the co-pay amount has to be paid before the insurance claim is paid off.

Experts recommend a policy without co-payment or deductible so that the insurance company bears the entire claim amount. Under the co-pay clause, either a specific percentage of the medical expenses or a fixed amount is borne by the insured and the rest is taken care of by the insurer. Insurers put co-pay condition in various ways depending on the terms and conditions. This is applied to costs involving hospitalisation, any tests, visit to doctor, etc.

However, going with the higher co-pay or deductible could be a risky option as it may put the policyholder in a situation where he is unable to afford the hefty medical bills owing to a higher out-of-pocket payment policy which can ultimately put the insured under unwanted financial stress.

Co-payment conditions

Co-payment is mandatory for senior citizens over the age of 60 years as the treatment expenses for them would be on the higher end as compared to other age groups. Other than that, only a few insurance policies have a mandatory co-payment clause. John Maybe, executive director, Coverfox Group, says most of them provide policyholders with a choice of co-payment option, allowing them to pay lower premiums. “Co-payment is provided to people on the basis of their age group. Depending on their critical illnesses or the kind of risk involved, a policyholder can apply for a co-payment option of 5-20%.

Certain situations such as previous and current medical conditions, physical state, financial condition, lifestyle, etc., must be taken into high consideration before opting for higher or lower co-payments. Goyal says one must understand that the primary reason for any policy seeker to buy a health insurance is to be financially supported during an unexpected medical emergency. Hence, you must be sure about your financial capacity to pay the money out-of-pocket while agreeing for co-payment option.

Opt for a comprehensive cover preferably

Opt for a comprehensive health cover and take certain essential riders depending on your needs. Also, policyholders can take a super top-up plan with higher deductibles, which will be cost effective. Also, before buying a health cover, it is important to assess the size of cover that you will need depending on the age of family members, exclusion, specific waiting period, etc. Also look at inflation adjusted sum insured, disease-wise sub-limits, room rent and ICU sub-limits, restoration benefits, etc.

Ideally, go for a sizable base plan insurance that covers your medical emergencies, along with a higher deductible super top-up plan. This, John Maybe of Coverfox Group says, will allow people to get their medical expenses covered even if they have exhausted the sum insured of their regular health insurance policy. “Also, to save out-of-pocket expenses, one can opt for a few riders consumable covers that include daycare expenses, less waiting period for pre-existing diseases (PED) or the option for cashless hospitals, etc