What are these co-pays that’s included in insurance policy?

 

Co-payment

  • A co-paymentis a fixed amount of money you pay as a part of your medical bills. Your health insurance plan pays the rest of the cost.
  • For example,

Co-Payment (stated in policy) = RM 300

Medical charges = RM 10,000

You pay = RM300

Insurance company pay = RM9,700

 

Co-insurance

  • A co-insurance is a percentage of your medical bill that you must bear, and your health insurance company will pay the rest of the cost.
  • For example,

Co-Insurance (stated in policy) = 10%

Medical charges = RM10,000

You pay = RM 1,000

Insurance company pay = RM 9,000

  • Usually there is a maximum of co-insurance amount that you’re subjected to pay, e.g. minimum RM300, maximum RM 1,000.

Deductible

  • A deductible is the amount that you must pay for your medical bills before an insurance company will pay the remaining costs.
  • Deductibles are usually minimum RM20,000/year.
  • For example,

Deductible (stated in policy) = RM 20,000/yr

2018 – April

Medical charges = RM15,000

Insurance company pay = RM 0

You pay =RM 15,000

 

2018 – September

Medical charges = RM 10,000

You pay = RM 5,000

Insurance company pay = RM 5,000

 

2018 – December

Medical charges = RM 30,000

You pay = RM 0

Insurance company pay = RM 30,000

 

Because you’ve already footed the first RM20,000 of medical bills, therefore, the subsequent bill for the year is paid by insurance company.

2019 – February

Medical charges = RM 20,000

You pay = RM 20,000

Insurance company pay = 0

 

Because it’s a new year, so the deductible refreshes as well.

 

Why are these co-pays included in your insurance policy?

These features are introduced to reduced monthly premiums, the higher the co payment the lower the premium. A medical card with deductible can have a monthly premium of almost 3x lower than a medical card without any co-pay.

 

Lastly, not all medical cards have co-pay included, and each company may have a different amount of co-pay. I’m only speaking in general, to know more about this, call up your insurance agent to clarify.

 

Yi Ling

Wealth Planner

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