The General Insurance Council is reportedly considering mandatory 10 per cent co-payment, capped at ₹5 lakh per retail health insurance claim, covering cashless and reimbursement inpatient hospitalisation claims but excluding outpatient claims. According to reports from Business Standard, this regulatory development highlights the growing importance of understanding these cost-sharing mechanisms in health insurance policies. Additionally, the Insurance Regulatory and Development Authority of India (IRDAI) has provisions for using two health insurance policies to cover single hospitalisation bills when one policy is insufficient or the primary insurer rejects expenses.
Co-payment makes policyholders pay a percentage of an admissible claim, while a deductible is a fixed amount that must be paid before coverage begins. As reported by Business Standard, with a 10 per cent co-payment on ₹2 lakh claim, the policyholder pays ₹20,000 and the insurer pays ₹1.8 lakh. Similarly, with a ₹50,000 annual aggregate deductible on ₹2 lakh, the policyholder pays ₹50,000 and the insurer ₹1.5 lakh. According to Vineet Gupta, head – product development at ManipalCigna Health Insurance, any policy can have these clauses, with some plans having neither clause while others may have one or both options.
Both clauses reduce premiums significantly, with premiums falling by as much as 40-50 per cent depending on the level selected, as reported by Rohan Goel, business head of health insurance at Policybazaar. According to Shilpa Arora, co-founder and chief operating officer at Insurance Samadhan, this happens because financial risk gets shared between the insurer and the policyholder. The cost-sharing structure means that policyholders bear a portion of the claim amount, which reduces the insurer's overall liability and enables premium reductions.
Under IRDAI's provisions, the primary policy determines settlement, with the second insurer covering only remaining unpaid amounts once the first insurer has settled up to its coverage limit. As per IRDAI's 'Master Circular on Health Insurance Business', the primary insurer coordinates with other insurers to ensure balance settlement without causing hassles to policyholders. For example, if a ₹10 lakh hospitalisation bill requires ₹5 lakh coverage from the first policy but ₹4.5 lakh remains unpaid, the first insurer pays its full ₹5 lakh limit, and the remaining ₹4.5 lakh can be claimed from the second insurer. The second insurer assesses claims based on its own terms, potentially covering the full ₹4.5 lakh or excluding portions, leaving the policyholder to bear any excluded amounts.
Young, healthy buyers should prioritise coverage without these clauses, while older buyers and people with pre-existing conditions may find them useful if their premiums are very high, according to Kapil Mehta, co-founder at SecureNow. Buyers with backup cover may consider small deductibles, but they should remember they will lose corporate cover upon retirement. When using multiple policies, policyholders must inform both insurers timely about hospitalisation to avoid suspicion and claim rejections. They should maintain attested copies of documents including hospital bills and prescriptions, and carefully review policy terms regarding coordination conditions and coverage limits to ensure optimal claim settlement.
