Policyholders have to pay a portion of the fee they are naturally discouraged to make claims for treatments over a common issues such as cough and cold, gastric distress, etc.Putting in copay clauses in policies not only helps health insurance companies save a portion of expenses but also gives the company certain advantages as outlined below. The remainder of the amount will be paid by the insurance company. Thus, a copay in health insurance is an arrangement made with the health insurance company, in which the insured will need to pay a part of the medical expenses on their own. Rs.15000 as a copayment and the rest 90% will be paid by the insurer. In this case, she has to bear 10% of 1.5 lakh i.e. She has the approved claim of Rs.1.5 lakh. Nidima bought a health insurance policy and agreed to a copayment of 10%. The copay clause, along with the percentage, is always mentioned in the insurance policy and applies to medical services. Therefore, you can say that it is an admissible claim amount that both the insurer and insured pay on a sharing basis according to the respective percentages. However, the rest of the amount will be paid by the insurer. In simple words, the copay in health insurance is the percentage of the claim amount that is borne by an insured person under a health insurance policy. So, if you are a new entrant in health insurance don’t let copayment confuse you. Most health insurance providers offer health insurance with a copay clause. Thus, to curtail claims fraud, copayment came into existence. It’s not only affecting the insurance sector but also impacting innocent customers. According to the study conducted by EY (consultancy firm) on financial crime in India, there is a rise of 30% in insurance fraud since 2018 which is alarming. Fraudulent claims cost lots of money to the health insurance sector each year.
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