What is co-payment (co-pay) in health insurance?

A co-payment is the share of an admissible claim that you pay yourself, set in the policy as a percentage or an amount. It is worked out on the amount the insurer accepts as payable, not on the hospital's full bill, and it does not reduce your sum insured. A co-pay may apply to every claim or only in situations the policy names, so check the clause before you accept the deduction.

One insurer's health wording defines co-payment as a cost-sharing requirement under which the policyholder bears a specified percentage of the admissible claim amount, and adds that a co-payment does not reduce the sum insured. IRDAI's CIS format describes a co-payment as a specified amount or percentage of the admissible claim amount, paid by the policyholder. A health policy must state its co-pay limits, if it has any.^{[1, 2]}

How a co-pay is applied

The co-pay is calculated on the admissible amount — what the insurer accepts as payable under the policy — after items the policy does not pay have been taken out. In that same product, every claim is subject to a 5% co-payment on the amount admissible and payable, and the insurer pays what remains after the co-payment is deducted.^[1]

Where co-pay conditions hide

A co-pay can be written to apply to every claim, or only in situations the policy names. Conditions a policy might attach include your age when you joined, the city or zone where you were treated, or whether the hospital was in the insurer's network. These are product terms, so the only reliable source is your own policy.

Start with the Customer Information Sheet, whose format gives the policy clause number for each item, and then read the co-pay clause it points to.^[2]

Was the co-pay applied correctly to your claim?

1. 1

   Find the co-pay clause

   Note the percentage and the situations in which it applies.

2. 2

   Check that your situation fits

   If the co-pay applies only at a non-network hospital, check whether your hospital was in the network on the date of admission. If it depends on age, check your age as the policy defines it.

3. 3

   Check the base

   The percentage should be taken on the admissible amount, not on the hospital's full bill.^[1]

4. 4

   Ask for the working

   Where part of a health claim is disallowed, the insurer must give full details with reference to the specific policy terms. Ask for the computation sheet if it was not sent.^[3]

To see a co-pay next to a deductible and a sub-limit, read deductible vs co-pay vs sub-limit. If a co-pay was taken along with other deductions, reading the settlement sheet explains each line.

ClaimAssure is an independent private platform. It is not an insurer, IRDAI, Bima Bharosa or the Insurance Ombudsman, it never files anything on your behalf, and it cannot promise any outcome. What it does is read your documents and show you what they say.

More on insurance terms