![]() ![]() ![]() The German healthcare system had introduced copayments in the late 1990s in an attempt to prevent overutilization and control costs. However, a copay may also discourage people from seeking necessary medical care, and higher copays may result in non-use of essential medical services and prescriptions, thus rendering someone who is insured effectively uninsured because they are unable to pay higher copays. In health systems with prices below the market clearing level in which waiting lists act as rationing tools, copayment can serve to reduce the welfare cost of waiting lists. It may be a small portion of the actual cost of the medical service but is meant to deter people from seeking medical care that may not be necessary, e.g., an infection by the common cold. Insurance companies use copayments to share health care costs to prevent moral hazard. Copayments do not usually contribute towards any policy out-of-pocket maximum, whereas coinsurance payments do. ![]() It must be paid before any policy benefit is payable by an insurance company. It is technically a form of coinsurance, but is defined differently in health insurance where a coinsurance is a percentage payment after the deductible up to a certain limit. It may be defined in an insurance policy and paid by an insured person each time a medical service is accessed. ( February 2017) ( Learn how and when to remove this template message)Ī copayment or copay (called a gap in Australian English) is a fixed amount for a covered service, paid by a patient to the provider of service before receiving the service. You may improve this article, discuss the issue on the talk page, or create a new article, as appropriate. ![]() Also, some insurers may levy higher copayment in case treatment is done at non-network hospital.The examples and perspective in this article deal primarily with the United States and Germany and do not represent a worldwide view of the subject. For example, plans for senior citizens come with a higher copayment clause. The copayment clause depends on the plan that you are selecting. You need to pay this amount as the percentage of the sum insured amount in the policy document. How does copay or copayment works?Ĭopay or copayment is usually an amount you need to pay at the time of claim settlement, while the insurer will pay the remaining amount. To avoid these unforeseen costs, which can make any robust financial plan go for a toss, many people prefer paying a higher premium to stay stress-free. Healthcare costs are rising and even at a faster pace in metro cities. Why policies without copay are more popular even if they are expensive? Hence, the premium is lower than compared to policies without a copay clause. In case there is a copay clause, you are sharing this risk with your insurer. Why policies with copay clause are cheaper?Ĭopay means you bear a certain portion of the admissible claim amount with your insurer. However, if you have financial resources, we recommend purchasing a plan without copay to avoid financial stress in the future. This will also help you save on the premium amount. For example, if you follow a disciplinary and healthy lifestyle, you may consider buying a plan with a copay clause. Should I buy a policy with or without copay?Īs mentioned above, you need to consider your lifestyle, previous and current health condition, savings, probability of raising a claim, etc., before deciding. When you buy a policy, you will get the policy document where all details are mentioned - inclusions, exclusions, copay clause, copay percentage, etc. How can I know the copay percentage in my policy? ![]()
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