In today’s uncertain times plagued by health scares and expensive medical services, health insurance can be of immense help. While health insurance can provide financial security during distressing times, it can also be challenging to comprehend. This article will help you understand some of the terms associated with health insurance, like coinsurance and copayments, so that you can make optimal use of your policy.What is coinsurance?
Coinsurance refers to the amount of medical expenses you, as a policyholder, have to start paying after you have met your deductibles (the fixed amount you have to pay to your insurer before the policy can kick–start). Coinsurance is usually measured in percentage and is often confused with copayment regarding health insurance.
For instance, if your coinsurance is 20%, then you have to pay 20% of the treatment cost while your insurer will handle the remaining 80%. To further illustrate, if your health care treatments have cost INR 10,000, you will have to bear INR 2000 (20%) of the cost, while your insurance provider will bear the remaining INR 8000 (80%).What is copayment?
Copayment refers to the fixed portion the policyholders must bear for medical treatments while the insurance provider bears the remainder. Copay, or copayment, can be a fixed amount or a fixed percentage of the total cost. Keep in mind that lower copay payments mean that the monthly premium payments will be higher.
For example, if your insurance policy provides a copay amount of INR 2000 and your treatment costs INR 10,000, you will have to bear that amount while your policy provider will pay the rest of the INR 8000. Or, if your policy includes a copayment clause entailing that you cover 10% of the total treatment cost, the amount you pay will be INR 1000 (10%), while your insurer will bear the remaining INR 9000 (90%).What Is Coinsurance vs Copayments?
The differences between coinsurance and copayments as per various parameters have been listed below:
Applicability: When it comes to coinsurance, while the amount you have to pay might vary, the percentage payable remains fixed as per the policy. On the other hand, copayment is fixed regardless of whether it is an amount or percentage of the treatment costs.
Payment process: With coinsurance, you need to pay for the medical services received only after meeting your treatment/annual deductible. However, with copayments, you have to bear cost–sharing payments each time you avail medical services.
Time of payment: With coinsurance, the amount you pay towards your medical expenses is billed by your policy provider, and you have to directly pay them. However, under copayment, you have to bear the expense when seeking medical service.
Effect on deductibles: Coinsurance is payable only after you have paid deductibles; however, copayments go towards your deductibles under specific circumstances only.
Now that you know more about copayments and coinsurance, choose a health insurance plan after looking at the applicable clauses and other covered services.Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.