Whether we talk about -
The Chunky Dunky Nike x Ben & Jerry
Nike x Billie Eilish
Our Place x Selena Gomez
Nike x Serena Williams
Gucci x Harry Styles
Collaboration has almost always been favourable for brands, companies, and celebrities alike.
But what happens if we think about collaboration in financial sectors—specifically, in the health insurance industry—between an insurance company and a policyholder?
Of course, we are talking about copayment—the collaboration between an insurer and an insured during claim settlement to purchase a health insurance plan.
So are copayments in health insurance a good perk, what are its usage, what are the best plans with no copayment features, and what might impact health insurance premiums? It’s time to find out!
What is Health Insurance?
Health insurance is a financial tool that covers hospitalisation expenses in return for a small fee every year. Think of it like an OTT service subscription—there are different platforms like Netflix, Amazon Prime, Jio Cinema, etc. Within these platforms, different plans cost different amounts and have their own set of features, advantages, and disadvantages.
This is exactly how an insurance policy works. Different insurance companies, such as Aditya Birla, Bajaj Allianz, Care, HDFC ERGO, etc., offer various insurance policies. These policies cost different amounts and have their own features, advantages, and disadvantages.
However, unlike buying a Netflix subscription, you should consult an expert before purchasing an insurance policy.
Heads Up: It takes an average person up to 5 hours to read & analyze a policy, and 10 hours or more to compare different plans and make a decision.
This is why we propose a better alternative - taking a 30-minute FREE consultation with Ditto’s certified advisors. We have a spam-free guarantee, and we’ll never push you to buy a plan. Don’t delay this - we have limited slots every day, so book a quick call here before they run out.
What is Co-payment?
Co-payment is a pre-decided ratio between the insurer and the insured individual, where they settle the bill in this proportion.
When purchasing a health insurance policy, you have two choices—to buy the policy with a co-payment, which results in lower premiums, or to purchase one without.
Let’s understand this better with an example:
Navin buys a health insurance plan from one of the best health insurers in the nation. His policy document included a copayment clause that required a 20% copay every time he made a claim.
Here’s a look at how his hospital bills were paid off during his 1st hospitalisation that was covered under his policy -
Coverage = INR 20 Lakhs
Hospital Bill = INR 4 Lakhs
Decided Copayment = 20%
Payment by the Health Insurer = INR 3,20,000
Payment by the Insured Individual = INR 80,000
One look at this, and you start wondering immediately why would any individual ever opt for this option, after all, doesn’t one avail of a health insurance plan to avoid spending from one’s savings during health crisis moments?
We say “Touché”!
However, the problem is that desperate times call for desperate measures.
Let’s say you are a senior citizen or a person with pre-existing diseases. There are chances that a co-payment is not optional. This is because of the higher risks of payout and the lengthy, complicated treatments you may have to undertake.
Under such circumstances, copayment is the only way to get a plan. However, if these two aren’t what you relate with, no questions asked, no-copayment health insurance plans are your financial and medical BFF.
Should you opt for a Policy with or without copayment?
Well, that depends on your specific situation. As mentioned above, copayment is compulsory in some cases and optional in others.
In cases where it is compulsory, you should probably go for it because having a health insurance policy, even with a co-payment, is better than not having one.
However, if you can get rid of co-payment, you probably should.
Think about it – if you want to add a co-payment to save on insurance premiums, you will save on the premiums. But you will spend much more when making a claim – A classic case of penny-wise, pound-foolish.
Let’s discuss this in detail now – what are the pros and cons of having no co-payment?
Pros of No-Copayment in Health Insurance
(i) No out-of-pocket expenses — When no copayment is involved, policyholders do not need to worry about spending out of their pocket during medical emergencies despite having coverage that should act as a financial shield to protect their savings.
(ii) Convenient access to quality healthcare — When a copayment is involved, policyholders, despite having health insurance policy coverage, are in two minds when availing of high-end medically required treatment. They must dig into their pockets to pay off a portion of their hospital invoice.
With copayments no longer a hurdle, policyholders need not worry about availing themselves of quality healthcare services to ensure guaranteed treatment and an efficient cure as soon as possible.
(iii) Easy claim settlement procedure — When copayments are involved in a health insurance policy, the claim settlement process becomes complicated. Calculating the share to be paid by each party, keeping the payments in sync, paying towards the invoice, etc., complicates the process immensely. An insurance policy with no copayment makes the entire process hassle-free and convenient.
(iv) Smooth preventive care coverage - With the burden of copayment on one’s head, policyholders might want to avoid screening and preventive care procedures considering the financial share of the consequences that he/she will have to take up. On the other hand, with a no-copayment health insurance plan, policyholders can conveniently avail of preventive care procedures crucial to the early diagnosis and treatment of any ailments.
(v) Effortless coverage for chronic ailments - Chronic ailments call for repeated hospitalisations and lengthy treatment procedures. If you have opted for a no-copayment health insurance policy, you need not worry about contributing to repeated copayments. Your health insurance provider will shoulder all the financial responsibilities towards your hospital invoices.
(vi) Uncomplicated health insurance plan comparison - When it comes to availing of health insurance plans, potential policyholders need to understand that this is a huge financial responsibility that is in for the long run.
Hence, such decisions require one to bank on trustworthy free health insurance policy comparison tools and unbiased health insurance experts so that they can make an informed decision when choosing a policy.
When determining the plan that would best suit one’s medical and financial requirements, multiple factors are already taken into consideration (for example, room rent restrictions, disease-wise sub-limits, pre- and post-hospitalisation expense coverage, network hospital, etc.). Adding the copayment clause to this mix would only complicate matters further.
So, it’s best to choose a no-copayment health insurance plan and remove this parameter from the list completely.
Cons of No-Copayment in Health Insurance
(i) Higher premium — With any health insurance provider and plan, there is always an option to pay a copayment. The perk such optional copayments offer is a reduced premium for your health insurance plan. With a no-copayment policy, you will be paying the normal premium amount.
REMEMBER: While a copayment-imbibed plan might offer a mitigated premium, the long-term financial implications of this when you keep paying 10%- 20% of the hospital bills every time you are hospitalised are immense.
(ii) Chances of low/no coverage if you are a senior citizen/one with pre-existing ailments — When it comes to high-risk payout cases, health insurers are reluctant to offer plans at all, or even if they do offer coverage, the premiums are too high or the coverage too low. Under such circumstances, accepting the copayment clause is the only option to water down the situation and get individuals to purchase a health insurance policy.
Best Insurance Policies with No Copayment in 2024
- HDFC ERGO Optima Secure: Being one the top policies in India, naturally, this policy has no disease-wise sub-limits, room rent restriction, and, of course, no copayment. As an insurer, HDFC ERGO has a claim settlement ratio of 97.5% and an ICR of 81.9%, one of the highest-rated in India. The only downside of this policy is that it doesn’t have many riders to customise it as per your needs. This is where the next policy comes into play.
- Care Supreme: Care Supreme is also one of the best in the industry. It is a comprehensive policy, as well as an economic one, which is in the sweet spot of most people. This policy has several unique features such as no loading charges, Super NCB – where your no-claim bonus will increase by 100% yearly up to 500% of the sum insured, etc. However, one of the few drawbacks is that this has a pre-existing disease waiting period of 4 years, but you can reduce that with an add-on. As an insurer, Care has a claim settlement ratio of 90.75%, with 9,400+ network hospitals.
- Aditya Birla Activ One: Activ One is one of the few policies that covers 7 chronic conditions right from day one – Asthma, High BP, High Cholesterol, Diabetes, etc. However, this is a solid policy for people without these PEDs, as well. It has no room rent limits, co-payment, or disease-wise sub-limits. This policy also has a restoration feature of 100% of the base amount, unlimited times a year, apart from a no-claim bonus of 100% per annum up to 500% of the base sum insured, similar to Care Supreme.
- Niva Bupa ReAssure 2.0: Niva Bupa is one of the companies that introduces the most unique features in its policies. It checks all the basic boxes and has some extra bells and whistles, all for a good bargain. This is usually recommended for people with benign pre-existing conditions such as BP or Diabetes, but it is also a great plan for those without. ReAssure 2.0 has three variants, and you can choose the one that best suits your medical and financial needs.
- Bajaj Allianz Health Guard: This policy has three variants: silver, Gold, and Platinum. Silver is the most economical of the lot, but it has a very low cover amount of either ₹ 1.5 lakh or ₹ 2 lakh, and it has many restrictions.
The Gold and Platinum variants are much better as they have most of the features of a good policy and don’t include many restrictions. However, considering its features, you should keep in mind that the Platinum variant is on the more expensive side.
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Conclusion
Health insurance policyholders are often torn between choosing:
- A plan that comes with copayment options is beneficial in the short term and is a financial disaster in the long run, owing to copays over hospital bills or
- A plan that offers no copayment options that seek higher premiums but mitigates any financial worries during hospitalisation.
And as health insurance experts, we always say, the latter is always the best choice. So, given a choice, and if it caters to your tailored medical and financial requirements, choose the best health insurance plans with no copayment.
