Having health insurance is crucial for everyone to manage unforeseen medical expenses. It helps to avail of quality health care at affordable cost, especially for the mid-income and lower-income groups. With medical inflation rising at an alarming rate in India, the burden of increasing healthcare costs is affecting millions in the country. In such a scenario, having a health insurance policy will help us finance the medical treatments during an emergency. When opting for a health insurance plan, we should be aware of the co-pay in medical billing. It is a common feature of many medical insurance policies. Under this provision, the cost of medical care is shared between the policyholder and the insurer.
Copay Meaning in Medical Billing
We should know the meaning of copay in medical billing to understand how it will affect our insurance premiums. In health insurance, a copay or co-payment is a cost-sharing provision where a fixed percentage of the claim amount has to be paid by the insured person from their pocket against the medical expenses. The rest of the amount will be paid by the insurer. Co-payment percentage in medical billing is generally decided at the time of the policy purchase. In India, the copay percentage usually ranges between 10% to and 30% of the total medical expenses, while the insurer pays the balance claim amount. So, before opting for a health insurance policy, we should carefully read the copay clause to get an idea about the contribution we need to make during claim settlement. This will help avoid any unpleasant surprises later during the claim settlement process.
What is Copay in the Medical Billing Code?
Copay comes in two main forms - voluntary and mandatory copay. Voluntary copay means the policyholder chooses to pay a certain percentage of the claim amount from his pocket. While mandatory copay is a provision the insurer puts as a mandatory clause as per certain terms and conditions of the health insurance policy.
There are also a few other types of copay in medical billing. The copay on reimbursement claims is one where some health insurance companies apply a copay clause on reimbursement claims when a person avails treatment from a non-network hospital.
Some health insurers implement a special copay clause for policyholders in metro cities as expenses in these cities are generally high in comparison to other areas. This is known as a copay based on the location/zone.
Benefits of Copay in Medical Billing
The copay in medical billing offers several benefits to the policyholder. Some of the advantages are:
- Health insurance policies with a copay provision are cheaper.
- Only a meagre part of the claim settlement amount is to be paid by the policyholder. The rest will be paid by the insurance company.
- The copay feature is applied to almost all senior citizen health insurance plans and even an elderly person with a pre-existing disease will get adequate coverage at a low premium.
The basic objective of the copay clause in health insurance policies is to reduce the cost of unnecessary claims for medical treatment.