What is Co-Pay and How Does That Improve Your Health Insurance
With healthcare costs increasing steadily, it's understandable that both the cost of healthcare as well as health insurance is an increasing concern for everyone.
One method to manage the costs of health insurance is co-payments — co-pay is a mechanism that allows insurance providers to reduce the cost and present a win-win scenario for both insurers and the insured.
A health policy with a co-pay feature can help you make savings in the long run in the right circumstances. Let's cover what co-payments are and who it might be best suited for.
What is Co-Pay?
Co-pay is an agreement between the insured and insurer that the insured will pay a percentage of the hospitalisation expenses and the rest will be covered by the insurer. The percentage paid by the insured with co-pay can vary from 10% to 30% of the sum assured.
In 2021, the Ministry of Health implemented co-payment requirements for IP riders. That is because it was found that when there was full coverage for IP riders, some medical professionals overcharge and medical bills were found to be, on average, 60% higher.
As healthcare bills increased, Integrated Shield Plan providers in Singapore had to increase insurance premiums to remain sustainable.
This brings us to the benefits of co-paying.
What's the Benefit of Co-Payments?
With co-payment, users are less inclined to pay outrageous medical bills or go for unnecessary medical treatment as they now have to foot a part of the upsized bills. This will lead to fewer opportunities for overcharging by medical professionals in Singapore.
Insurance companies charge premiums based on a few factors, including the financial risk incurred to the insurer in exchange for providing you coverage.
As a co-pay feature reduces the risk incurred to the insurer (because it lowers the number of healthcare bills payable by the insurance company), co-pay features often reduce the premium that you have to pay.
Is the Co-Pay Option For You?
Though the reduced premiums are no doubt a big benefit for anyone considering their options for health insurance, they may not be for everyone.
The largest downside of co-payment is of course the percentage of medical bills that you will have to pay in the event of a claim. Therefore, co-payment is more ideal for healthy people who are unlikely to be hospitalised.
For individuals who are wary of suffering a huge healthcare bill that is beyond their capacity to pay, there are riders that you can add on to your integrated shield plan for better protection at an affordable cost.
Let us take a look at PRUShield and its supplementary riders plan to see how it works.
Read Also: Key Moments in Life When You Might Need an Integrated Shield Plan
PRUShield
PRUShield along with Prudential's suite of supplementary plans are designed to complement MediShield Life and provide you with a more comprehensive medical coverage depending on your age and budget.
PRUShield provides you with a strong set of benefits including:
| PRUShield Benefits |
|---|
|
There are three main PRUShield plans: Standard, Plus and Premier, each with different levels of coverage.
| Main Plans | Coverage | Supplementary Plans |
|---|---|---|
| PRUShield Standard | Coverage for medical and surgical expenses at restructured hospitals (up to Class B1 ward) | No Supplementary Plans |
| PRUShield Plus | Coverage for medical and surgical expenses at restructured hospitals (up to Class A ward) | PRUExtra Plus CoPay & PRUExtra Plus Lite CoPay |
| PRUShield Premier | Coverage for medical and surgical expenses at private and restructured hospitals | PRUExtra Premier Copay, PRUExtra Preferred CoPay & PRUExtra Premier Lite CoPay |
Read Also: Prudential PRUShield Health Insurance Review
PRUExtra
PRUExtra plans are supplementary plans that can be used to further augment PRUShield plans that you may be considering so that your coverage matches your needs. There are two highlight features that are part of all PRUExtra plans.
- The PRUExtra plans cover 50% of your co-insurance amount
- There is a S$3000 stop-loss for Panel providers and Extended Panel specialists
PRUShield Premier Supplementary Plans
PRUExtra Premier CoPay
PRUExtra Premier CoPay provides the best coverage that PRUShield can offer, offering coverage at all Singapore private and restructured hospitals. PRUExtra premier CoPay covers 95% of your deductible amount.
PRUExtra Premier Lite CoPay
PRUExtra Premier Lite CoPay provides most of the benefits of the regular premier version, including coverage of private hospitals and cutting your co-insurance amount by half. However, in exchange for lower premiums, it only covers 50% of your deductible amount.
PRUExtra Preferred CoPay
PRUExtra Preferred CoPay provides nearly all of the benefits of PRUExtra Premier CoPay. However, it only covers select private and restructured hospitals. Thankfully the list of healthcare providers and specialists that PRUExtra Preferred CoPay covers is quite extensive and can be found on the PRUPanel Connect website. In addition, PRUExtra Preferred CoPay shares the 95% deductible coverage with PRUExtra Premier CoPay.
PRUShield Plus Supplementary Plans
There are two PRUExtra supplementary plans for PRUShield Plus, PRUExtra Plus CoPay and PRUExtra Plus Lite CoPay. PRUExtra Plus CoPay covers 95% of your deductible whilst PRUExtra Plus Lite CoPay covers 50% of your deductible. These PRUExtra supplementary plans have the same hospital/ward coverage as PRUShield Plus, covering all Singapore Restructured Hospitals (up to Class A Ward).
Extended Panel (EP)
The extended panel is an initiative set up by the Multilateral Healthcare Insurance Committee (MHIC) allowing IP insurers to recognise each other's panel doctors mutually. Eligible policyholders seeking treatment from EP specialists benefit from a S$3000 stop-loss. For a Registered Medical Practitioner to be considered an EP specialist, they should:
- Be on another IP insurer's approved panel list;
- Obtain pre-authorisation from Prudential;
- Follow Prudential fees schedule;
- Meet pre-Authorisation terms and conditions.
Claim-Based Pricing
PRUExtra Premier CoPay as well as PRUExtra Preferred CoPay both benefit from a claim-based pricing model. With this pricing system, you start paying the lowest premium of your age band and the PRUWell reward, giving 20% savings if your policy is incepted with no exclusions.
Your premium level is determined by previous claims during the review period. As long as no claims are made or claims made in the below situations,
- 1. Claim payment of S$1,000 and below from Private Hospitals under Panel Providers only
- 2. Claim payment of S$1,000 and below from Private Hospitals or Private Medical Institutions that are not under our Panel Providers
- 3. Any amount from Restructured Hospitals or Treatment Centres only
You'll continue to pay the standard-level premium, given that you’re at the standard-level premium at the last policy renewal date.
Conclusion
Co-pay, alongside other mechanisms such as claim-based pricing, allows insurers to create a pricing model that is cheaper for us. Allowing us to spend more on the coverage that we need, allowing us to have peace of mind with our health insurance coverage at an affordable cost. Interested users looking to get an Integrated Shield plan with comprehensive coverage and claims-based pricing can refer to this detailed PRUShield review or apply for one here.