Co-payment in health insurance explained: How to calculate your share of the hospital bill

A co-payment is a fixed percentage of an approved hospital claim that you must pay from your own pocket. This guide explains how to calculate a co-payment in health insurance, why some senior citizen policies have them, and how a copay differs from a deductible.

By Qrates research desk · 2026-11-01

A co-payment is a fixed percentage of your approved hospital claim that you pay out of pocket. The insurance company pays the rest, within your cover. This guide explains how co-payment in health insurance works using real hospital bill maths.

Quick answer: What is a co-payment in health insurance?

A co-payment is a fixed percentage of an approved hospital bill that you must pay from your own pocket. The health insurance company pays the remaining percentage up to your sum insured. If your policy has a 20 percent co-pay and your approved claim is ₹1,00,000, you pay ₹20,000 and the insurer pays ₹80,000.

What it is in plain words and why it exists

Insurance companies use co-payments to share the financial risk of a claim with the policyholder.

Mandatory co-payment for senior citizens

Some health insurance policies for older buyers include a mandatory co-payment. The share varies by plan. Tata AIG's co-pay page gives 20 percent of each approved claim for buyers over 61 on a plan, and the Arogya Sanjeevani wording filed with IRDAI by Star Health has 5 percent on every claim at all ages. Insurers link this to more frequent claims at an older age (ManipalCigna).

Voluntary co-payment for a premium discount

Some insurers let you choose a voluntary co-payment to lower your yearly premium (ManipalCigna). You pay less upfront for the policy. You take on more financial risk if you get admitted to a hospital.

Zone-based co-payment

A zone-based co-payment can apply if you buy a plan priced for a lower-cost area but get treated in a more expensive one. Some insurers divide India into zones, and the definitions differ by insurer. For example, Tata AIG's Geo Plan adds a 20 percent co-pay on claims for treatment in its Zone A, except for injuries (Tata AIG).

How a co-payment is calculated on a hospital bill

Assume you have a base policy with a ₹10 lakh sum insured and a 10 percent co-payment clause. You are admitted to a network hospital and the final bill is ₹5,00,000.

The hospital sends the ₹5,00,000 bill to the insurance company.
The insurer deducts ₹20,000 for items the policy does not pay for. These are listed in its non-payable list, such as carry bags and certain consumables (ICICI Lombard list).
This leaves an approved claim amount of ₹4,80,000.
Your 10 percent co-pay is calculated on the ₹4,80,000, meaning you pay ₹48,000.
You also pay the ₹20,000 for the non-medical items.
The insurer pays the remaining ₹4,32,000 directly to the hospital.

Copayment vs deductible: What is the difference?

You can have both a deductible and a co-payment in the same policy. They work differently when you make a claim.

Feature	Deductible	Co-payment
What it is	A specified rupee amount	A specified percentage of the admissible claim
When you pay	Before the policy pays anything	On every single claim
How it scales	Flat threshold (e.g., ₹50,000 a year)	Scales with the bill (e.g., 10 percent)

A deductible is a fixed rupee amount you pay before the insurance policy starts paying anything. If you have a ₹50,000 yearly deductible, you pay the first ₹50,000 of your covered expenses in a year, and the insurer pays the rest within your cover. A co-payment is a percentage applied to each claim it covers, no matter how small or large the bill is. Neither one reduces your sum insured (IRDAI FAQs).

The reported proposal for a mandatory 10 percent co-pay

Outlook Money reported on October 8, 2026 that the General Insurance Council is reportedly considering a mandatory 10 percent co-payment on retail health insurance policies, possibly capped at ₹5 lakh per claim. The report says the Council declined to comment and that the idea is still under discussion.

We did not find an IRDAI circular or a General Insurance Council document on this when we checked on November 1, 2026. Do not treat it as a rule. Check the IRDAI website for any update.

What to check in your own case

Reading the co-payment clause

Check your policy schedule to see if the co-pay applies to all claims or only specific illnesses. You can look up policies filed with IRDAI in the Qrates health insurance directory, then read the policy wording for the co-payment, zone and senior citizen conditions.

Can you remove a co-payment?

Some insurers sell a co-payment waiver add-on. Tata AIG, for example, describes one for senior citizen plans and one for its higher-zone co-pay, bought with the base plan (Tata AIG). Not every policy offers this, so check your own wording.

Common mistakes when claiming with a co-pay

Assuming a network hospital waives the co-pay. The co-pay can apply to cashless claims as well as reimbursement claims. In a cashless claim, you pay your share at the hospital counter (ManipalCigna).
Forgetting that the co-pay is calculated after non-payable items are removed from the bill. You pay for both the non-payable items and the co-pay amount.
Confusing a co-payment with a sub-limit. A sub-limit is a fixed cap on a specific expense, such as room rent or a named surgery (Care Health), while a co-pay is a percentage of the admissible claim.

FAQs

What is 20% co-payment in health insurance?

A 20 percent co-payment means you pay 20 percent of the approved claim amount. The insurer pays the remaining 80 percent up to your sum insured limit.

Health insurance me copay kya hota hai?

Copay ek percentage hai jo policyholder ko claim ke time apni jeb se dena hota hai. Baaki amount insurance company deti hai.

Is co-payment good or bad in health insurance?

A voluntary co-payment can lower your yearly premium. It increases your out-of-pocket expenses during a medical emergency.

Senior citizen policy me copay kyu hota hai?

Insurers link co-pays in senior citizen policies to more frequent claims and higher medical costs at an older age. The percentage differs by plan.

The short version

A co-payment is a fixed percentage of an approved hospital bill that you pay yourself.
It is calculated after non-medical items are deducted from the total bill.
Some senior citizen policies include a mandatory co-payment, and the percentage differs by plan.
A deductible is a fixed rupee limit, while a co-payment is a percentage of every claim.
The 10 percent co-pay reported in October 2026 is under discussion and is not a rule.

Sources

Disclaimer

Qrates is an information directory. It takes no commission from any company listed and does not recommend products. Figures are taken from the sources named and dated, and they change; check the company's own page before you decide. This is not investment, credit, insurance or tax advice for your situation. Read the policy wording and the prospectus for the exact cover, exclusions and waiting periods. Insurance is the subject matter of solicitation.