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10% Co-Pay Rule: Premium Cuts vs. Out-of-Pocket Costs
6 Oct
Summary
- A 10% co-payment means policyholders share claim costs.
- This could lead to lower health insurance premiums.
- Policyholders may face higher out-of-pocket expenses at claims.
A new proposal suggests a 10% co-payment for health insurance claims, meaning policyholders would cover 10% of the admissible amount, with the insurer paying the remaining 90%. This structure is designed to potentially lower insurance premiums by reducing insurer payouts. For instance, on a Rs 5 lakh admissible claim, the policyholder would pay Rs 50,000.
This co-payment aims to encourage greater cost discipline among policyholders and potentially moderate future premium increases. The primary benefit for individuals could be more affordable health insurance policies, making comprehensive coverage accessible to more people. However, this comes with a trade-off: policyholders will incur higher out-of-pocket expenses at the time of a claim.
The 10% co-payment is expected to apply uniformly to both cashless and reimbursement claims. In cashless scenarios, the insurer pays the network hospital directly, while the policyholder covers their share. For reimbursement claims, the policyholder might pay the hospital first and then receive the insurer's payout after the co-payment is deducted.
Currently, insurers offer various co-payment options. It remains to be seen if a mandated 10% co-payment will allow for optional zero co-payment plans at a higher premium. Policyholders are advised to scrutinize maximum out-of-pocket liability, sub-limits, and non-payable expenses before selecting a plan, weighing premium savings against potential claim-stage costs.
