Copay vs Consumables: Avoid Confusion in Your Health Insurance

• Written by Jagriti Chakraborty

  Reviewed by Nidhi Goyal

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“Have you ever checked your medical bill and wondered why certain charges are labelled as “copay” while others show up as “consumables”? Understanding how each works helps you plan for medical expenses, making it easier to control your healthcare costs.

What is a Copay?

A copay (co-payment) in health insurance is the fixed amount of a medical bill you pay out-of-pocket for a medical service, while the insurer covers the rest. Typically set as a fixed amount or percentage agreed upon when you buy a health insurance policy, a copay helps manage healthcare costs, discouraging unnecessary visits and actively contributes to lower insurance premiums.

This cost-sharing arrangement between the insured and the insurer ranges from 10% to 30%, further limiting excessive or avoidable claims.

The Copay Mechanism in Health Insurance

Health Insurance with copays splits medical expenses between you and your insurer. You pay a pre-set amount or percentage per service, while your insurer covers the remainder, making healthcare expenses more predictable and manageable.

How Copay Works:

• Policy Selection: You choose a health plan with a copay.
• Cashless or Reimbursement: For network hospitals, cashless claims may reduce out-of-pocket payment; otherwise, file a claim post-treatment.
• Cost Sharing: You pay the predetermined copay amount (either a fixed amount or a percentage) directly to the provider.
• Insurance Covers the Rest: The insurance company pays the remaining bill.

Copays help divide medical bills fairly between you and your insurer, reducing financial surprises during treatment. 

What are Consumables?

Consumables in health insurance refer to medical supplies and equipment that are used once and not reusable. These items often include PPE (gloves, gowns, masks), syringes and needles, surgical tape, cotton swabs, dressings and bandages, razors, and other essentials, such as catheters, sutures, and splints.  These seemingly insignificant items push hospital charges up by nearly 5%-15% in prolonged admissions.

Insurers often exclude them from coverage because prices differ massively across hospitals (for instance, a tissue box may cost ₹30 in one hospital and ₹130 in another), and you’re billed for the whole pack even if you use only part of it, which further adds to medical expenses.

Key Difference Between Copay and Consumables

Understanding the difference between health insurance with co-payment and consumables can be very tricky, but being clear about it saves you from unexpected medical expenses on your hospital bills.

• Nature: Copayment in health insurance refers to a pre-determined financial contribution that the insured must pay for treatments as per their policy schedule. Consumables are disposable medical supplies used during treatment and discarded afterwards.  Together, they represent two distinct cost components in overall healthcare costs.
• Purpose: The primary difference between copays and consumables is that copays are designed to control premiums and limit avoidable claims, whereas consumables often serve as a means to reduce costs. Insurers exclude consumables to prioritise core medical care and keep premiums more affordable.
• Who Decides: Copayments in medical insurance are mutually agreed upon by the insured and the insurer, within the guidelines set by IRDAI. Consumables, on the other hand, are predetermined by the insurer and clearly disclosed in the health plan.
• Impact on Premiums: Co-payments lower premiums but increase out-of-pocket costs at claim time, while a standard policy without consumables coverage offers lower premiums but significant hospital expenses at claim time, making it suitable for low-risk individuals who can manage costs with their savings.
• Coverage by Insurance: The insurer covers the maximum medical bill, while the insured pays a percentage each time they claim. Opting for the consumables benefit increases premiums but minimises hospitalisation costs, offering better protection for high-risk individuals or anyone prioritising greater financial security.
• Suitability: A copayment allows the insured to trade lower premiums for higher out-of-pocket expenses, making them a good fit if they want lower premiums and are comfortable bearing part of the costs. Consumables without consumable benefit, suitable for risk-takers or those with a significant amount of savings for handling unpredictable hospital supply out-of-pocket.
• Flexibility: Copayments allow balancing lower premiums with higher out-of-pocket costs; however, the consumable exclusion can result in higher hospital bills during treatment. With a consumable benefit, it raises the premium but provides flexibility to cover unexpected medical supply expenses.
• Customer Perception: Customers often perceive co-payments for medical consumables negatively. The credit goes to its hidden costs, a lack of transparency, and a heavy cost burden, particularly for chronically ill patients and low-income individuals. To combat the negative perception, insurers are now offering consumable benefits, as customers seek transparent coverage, simplified claims, lower out-of-pocket expenses, and digital accessibility.

>> Also Read: What is Health Insurance with Consumables Cover?

Tips to Manage Copay & Consumables Together

Managing copays and medical consumables together is key to minimising out-of-pocket healthcare spending. The following are a few tips to control copay and consumables costs.

• Select the Right Plan: Choose health insurance plans that strike the right balance between premiums, manageable copays and essential consumable benefits.
• Use Network Hospitals: Leverage network hospitals to benefit from cashless hospitalisation, pre-negotiated rates, and direct insurer coordination, reducing out-of-pocket expenses for treatment and medical supplies.
• Request Itemised Bills: Request an itemised breakdown of each item or service, including costs, clearly separating fixed assets from consumables to ensure transparency.
• Utilise Preventive and Wellness Benefits: Take charge of your health proactively with covered preventive check-ups, screenings, and more. Early detection of health risks can help avoid serious illness and expensive treatments, minimising high copayments and out-of-pocket expenses.

Do you know? Health policies, such as Care Supreme, offer wellness benefits, allowing adult policyholders to earn rewards on healthy days, which can help them receive a discount on renewal premiums. They can also enjoy the annual health check-up and unlimited visits to network fitness centres with be-fit benefits throughout the policy year. 

Copay vs Consumables Simplified

Strategically managing co-payments and medical supplies or consumables lets you plan your healthcare expenses more effectively. You can stay ahead of medical costs, prevent unforeseen bills, and maximise your insurance benefits for trouble-free health management.

>> Also Read: Deductibles, Coinsurance, and Copayment in Health Insurance

Disclaimer: All plan features, benefits, coverage and claims underwriting are subject to policy terms and conditions. Kindly refer to the brochure, sales prospectus and policy documents carefully.