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What is Co-pay in Health Insurance?

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Fraudulent claims cost lots of money to the health insurance sector each year. According to the study conducted by EY (consultancy firm) on financial crime in India, there is a rise of 30% in insurance fraud since 2018 which is alarming. It’s not only affecting the insurance sector but also impacting innocent customers. Thus, to curtail claims fraud, copayment came into existence. Most health insurance providers offer health insurance with a copay clause. So, if you are a new entrant in health insurance don’t let copayment confuse you.

What is Copay in Medical Billing?

In simple words, the copay in health insurance is the percentage of the claim amount that is borne by an insured person under a health insurance policy. However, the rest of the amount will be paid by the insurer. Therefore, you can say that it is an admissible claim amount that both the insurer and insured pay on a sharing basis according to the respective percentages. The copay clause, along with the percentage, is always mentioned in the insurance policy and applies to medical services.


Nidima bought a best health insurance policies and agreed to a copayment of 10%. She has the approved claim of Rs.1.5 lakh. In this case, she has to bear 10% of 1.5 lakh i.e. Rs.15000 as a copayment and the rest 90% will be paid by the insurer.

Thus, a copay in health insurance is an arrangement made with the health insurance company, in which the insured will need to pay a part of the medical expenses on their own. The remainder of the amount will be paid by the insurance company.

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What is Copay in Health Insurance

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Why is Copay in Insurance?

Putting in copay clauses in policies not only helps health insurance companies save a portion of expenses but also gives the company certain advantages as outlined below.

  1. Policyholders have to pay a portion of the fee; they are naturally discouraged to make claims for treatments over a common issues such as cough and cold, gastric distress, etc. which could technically be charged from the insurer.
  2. Paying a portion of the treatment means that users will be aware of the expenses they will also incur, thus bringing about a sense of ownership.
  3. Discourages people from seeking treatment from more expensive hospitals as they will also have to be a bearer of the expensive hospital bill.
  4. Mitigates the risk for insurance companies, as these companies operate on huge profits and losses. A 10% copay clause means that the company is directly saving 10% of all payments.

How to Select a Health Policy with Copay?

Here are some of the factors that you must consider when you go for a policy with copay:

  1. Copay percentage: This will be the percentage of the cost that the policyholder will have to bear. For example, if the insured individual incurs a medical bill of INR 50,000 and the co-payment clause is 10%, then the insured is expected to pay INR 5,000 while the insurance company will pay the remaining balance of INR 45,000.
  2. Premiums: Most policies with a co-pay clause will have lower premiums. Ensure that you compare a policy with a co-pay with other general health insurance policies and see how the premiums vary.

What is Co-Insurance?

In India, the terms copay insurance and co-insurance are used interchangeably. In a co-insurance contract, both the insurer and insured enter into an agreement where each party agrees to pay a fixed percentage of the medical bill. The percentages are usually represented as 90-10, 80-20, or 30-70 and so on, depending upon the clause. Copay health insurance, however, is the fixed amount to be paid for the availed medical services.

Features of Copayment

Understanding the concept of copay will help you to know the reason behind this clause and how much you have to contribute to your medical bills. Let’s talk about its basic features:

  • Only a partial amount has to bear by the insured, the major part will be paid by the insurance company.
  • It applies to medical services, including hospitalization expenses, doctor’s fees, medicines, and lab tests.
  • Plans with higher monthly premiums generally have a lower copayment percentage.
  • Applicable mostly on senior citizen health insurance plans.
  • The basic objective of the copay is to save costs and discourage unnecessary claims.

Importance of Copay in Health Insurance

Health insurance jargon can puzzle you, so it’s good to know about different terminologies to make the most out of your insurance policy. Now you have read about copayment, and its features now let’s understand its importance.

  • It divides the risk between the insurer and the insured. Though, the insured has to bear a minimum amount of the claim.
  • It reduces the burden of large premium payments.
  • Senior citizens with pre-existing diseases get adequate coverage at a lower premium with a co-payment clause.
  • It also discourages the unnecessary use of luxury facilities and hospitals and encourages policyholders to make only necessary claims under health insurance.
  • It also lessens the misuse of health insurance policies.

Does Copay Impact Health Insurance Premium?

If you happen to have a co-pay clause, it can directly impact the premium that you are paying. If you have a high co-pay with a deductible amount, naturally your insurance premium will be lesser. This is due to the fact that with a high co-pay, the risk of payment is divided almost equally between the insured and the insurer.

>> Check: Health insurance premium calculator

How is Copay Calculated?

A copay or co-payment is a cost-sharing arrangement between the insured and the insurer, where the insured pays a fixed percentage of the medical expenses incurred in the treatment of a particular condition or illness.

The exact copay amount and percentage can vary depending on the terms and conditions of the health insurance policy. Generally, health insurance policies in India have a copay clause that ranges between 10% to 30% of the total medical expenses, with the remaining amount being paid by the insurer.

For example, if the total medical expenses incurred during the treatment of a particular illness amount to Rs. 1 lakh and the copay clause in the policy is 20%, then the insured will have to pay Rs. 20,000 (20% of Rs. 1 lakh) and the insurer will pay the remaining Rs. 80,000.

It is important to note that copay is not applicable for all medical expenses. Some policies may have a copay clause only for specific treatments or medical procedures. It is important to carefully read the terms and conditions of the policy to understand the copay clause and its applicability.

Why do you need a Health Insurance Plan?

We cannot predict medical emergencies. They can happen to anyone, at any time. With hectic work schedules, unhealthy food habits, and variable sleep patterns, the modern lifestyle has gradually begun to take a toll on our health. Young adults are increasingly becoming prone to various lifestyle diseases, and it is high time we take steps to safeguard our health and that of our loved ones. Medical treatments are getting expensive due to medical inflation. Thus, a health insurance plan is what you need that will cover your medical bills and protect your finances from any potential impact. Besides, you can look for tax benefits under Section 80D of the Income Tax Act.

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Health Insurance is a shield that protects you and your loved ones in cases of medical emergencies.

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A right health insurance plan makes sure that financial crisis is not an issue during a medical emergency.

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With the skyrocketing cost of healthcare in the country, opting for a good health Insurance Plan is a smart decision for the safety of the individual and family as a whole.

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Difference Between Copay and Deductible

Copay and deductibles are key features in health insurance plans, and policyholders should have a clear idea about what is copayment in health insurance, and deductibles. Let us understand:

When enrolling in a health insurance plan, an individual has to first pay a certain fixed amount before the insurance provider covers any expenses; this amount is termed as deductible. The deductible is a key feature in super top-up insurance plans. Once the specified deductible is paid, the insurance provider will pay for any kind of medical expenses incurred, subject to the policy terms and conditions. In other words, the insurer will start offering coverage only if the total claim amount exceeds the deductible. Suppose a person has opted for a policy cover of Rs 5 Lakh and the deductible set at Rs 10,000. If the person raises a claim of amount Rs 50,000, then he or she has to pay the deductible amount first. The insurer would then pay the remaining amount, Rs 50,000 – Rs 10,000 = Rs 40,000.

A copay option, on the other hand, works slightly differently, and one should note the same. A copay is a mandatory clause in an insurance policy. The insured generally pays a fixed percentage of every medical bill. So, the primary difference to note between the two features is that a deductible is only paid once, and a copay in medical billing means the insured has to pay a part of the treatment expenses at the time of availing the medical services.

Copay Clause in Care Health Insurance 

  • If the age of the insured individual or the eldest insured person (for floater plans) is 61 (in some cases, 71) or more when taking a new policy, a mandatory copayment amount of 20% (or sometimes 10%) will have to be borne by the policyholder. The insurer is only liable to pay the balance amount as long as it is under the total sum insured.
  • If an insured person or eldest insured individual (for floater plans) reaches 61 years of age, we provide an option on the subsequent renewal to the policyholder wherein they can choose an additional 20% copayment option. The policyholder will get a 20% discount on their premium

There are various medical insurance plans in India, and you can select the one based on your requirements. When considering a policy, taking into account the co-pay clause and knowing what is co-payment in health insurance, and its significance, will give a clear idea and help you make a better decision for your future. However, it is possible to purchase a health insurance plan without a copay clause. But in that case, you have to pay a higher premium. It splits the risk and liability of claim between the insurance provider and the insured which makes plans affordable. So, you need to weigh your options and consider medical insurance accordingly. Check the health insurance coverage offered by Care with a copay clause that gives you more coverage and less obligation.

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Zeroing in on a health insurance plan for your family is a tricky choice, given the number of insurers in the market who offer similar policies. It is not wise to simply choose the policy with the lowest amount of premium. You need to compare different policies, their features and benefits. Care Health Insurance (CHI) is a specialist Health Insurer and offers products keeping in mind the needs of a customer in the event of a medical exigency. CHI offers a distinct set of benefits giving a clear choice for providing you with the best possible health insurance.


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Q. How Copay in health insurance works?

Before you jump to know how Copay in health insurance works, you should know what is co-payment in health insurance. It is a minimum percentage of the claim amount that you, as a policyholder, have to bear from the total hospital bill. The hospital insurance/ TPA desk at the hospital would inform you about the amount of the Copay. However, the maximum amount will be paid by us.

Q. What are Copay clauses in health insurance?

Under the Copay clause in health insurance, the proportion ranges between 20-30% will be borne by the policyholder for each claim. It applies to hospitalization expenses, pre and post-hospitalization medical expenses, alternative treatment, ambulance, and domiciliary hospitalization. It will increase by 10% per claim in the policy year until the insured attains 71 years.

Q. How to know about my Copayment liability at the time of Claim settlement?

It is advisable to read what is Copay in medical insurance. You will get to know about your Copayment liability at the time of Claim settlement from the hospital insurance/TPA desk, and you will also receive a message on your registered mobile number.

Q. Is Copay levied on Cashless Hospitalisation?

Yes, it is levied on cashless hospitalization as well.

Q. Are the policies with Copay clauses cheaper?

Yes, policies with copay clauses are cheaper because claim settlement liability divides between the health insurance provider and policyholders.

**Number of Claims Settled as of 31st March 2024

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^^Number of Cashless Healthcare Providers till 31st March 2024

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