A 10% Co-Pay on Every Health Insurance Claim? What the Proposal Could Cost You
Insurers are reportedly weighing a mandatory co-payment on retail health policies, capped at ₹5 lakh per claim. It is only a proposal — but here is the arithmetic.
Health insurance in India may be heading for a significant change in how claims are shared between insurers and policyholders. The General Insurance Council (GIC), the industry body representing general and health insurers, is reportedly considering a mandatory 10 per cent co-payment on retail health insurance policies, according to Outlook Money.
The proposal is still under discussion and has not been adopted. The GIC declined to comment on the report, and no draft regulation or consultation has been published by the insurance regulator.
What a co-pay means
A co-payment is the share of an admissible claim that the policyholder pays themselves. Many senior-citizen policies already carry co-pays, but most standard retail policies do not. Under the proposal, a 10 per cent co-pay would apply to retail health policies, with the policyholder's share reportedly capped at ₹5 lakh per claim.
The arithmetic
Using the 10 per cent rate and the reported cap:
- ₹1 lakh claim: you pay ₹10,000; the insurer pays ₹90,000.
- ₹5 lakh claim: you pay ₹50,000; the insurer pays ₹4.5 lakh.
- ₹25 lakh claim: you pay ₹2.5 lakh; the insurer pays ₹22.5 lakh.
- ₹60 lakh claim: your share hits the ₹5 lakh cap; the insurer pays ₹55 lakh.
The co-pay would come on top of costs policies already exclude. Experts quoted by Outlook Money pointed out that deductions for consumables — gloves, masks and other items many policies do not cover unless an add-on is bought — can add another 10 to 25 per cent to a bill. For expensive treatments such as cancer care running into tens of lakhs, the combined out-of-pocket cost could reach several lakh rupees.
Why insurers want it
The stated rationale is rising healthcare costs and concerns about distorted hospital billing. The logic of co-pays is that when patients bear part of the cost, they — and hospitals — have more reason to avoid unnecessary procedures and inflated bills. In return, insurers argue, premiums could be lower upfront.
What it would mean for you
If adopted, a mandatory co-pay would shift some financial risk from insurers to families, particularly for large claims. It would also make the size of your health cover only part of the picture: the amount you can afford to pay at the hospital counter would matter as well.
For now, existing policies are unaffected. Policyholders reviewing or renewing cover should read the co-pay, room-rent and consumables clauses closely, and consider keeping an emergency fund for medical costs. This article explains a reported proposal and is not personalised financial advice.
Sources
This article draws on the following reporting. Dates are when each source was originally published.
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