Copayment
A co-payment (or co-pay) is a fixed amount that a policyholder pays out-of-pocket for a specific medical service. The remaining amount is covered by the insurance company.
Example of Co-Payment
- Imagine you visit a specialist for a consultation, and the total cost of the visit is AED 400.
- Your health insurance policy stipulates a co-payment of AED 100 for specialist visits.
- At the time of your visit, you pay the AED 100 co-payment directly to the healthcare provider.
- Your insurance company will cover the remaining AED 300.
Impact of Co-Payments on Insurance Premiums
- Generally, policies with higher co-payments have lower monthly premiums.
- Co-pays are a way to share medical costs and lower your overall insurance premiums.
Interplay Between Co-Payment and Deductibles
- Deductible is the amount paid before your insurer pays for any services. After meeting the deductible, co-payments apply for covered services.
- Example:
Imagine you have a health insurance policy with a deductible of AED 1,000 and a co-payment of AED 200 for specialist services. At the beginning of the year, you visit a specialist and the total bill comes to AED 2,000.
Step 1: Deductible Payment
Since you haven't paid any of your deductible for the year, the first AED 1,000 of the specialist's bill goes toward meeting your deductible. You need to pay this amount out of pocket.
Step 2: Co-Payment Calculation
After your deductible is met, you must pay AED 200 as a co-payment for the specialist service.
Outcome
For this visit, you pay a total of AED 1,200 (AED 1,000 deductible + AED 200 co-payment). Subsequently, your insurance will cover the remaining AED 800.
