There are two types of financial contributions that policyholders make to their health care costs in the Nigerian health insurance market. They are referred to as copayments and deductibles. Although both involve paying for healthcare services, there are some significant differences between the two that should be noted.



What is a Copayment?

A copayment, also known as a copay, is a set amount paid by a policyholder at the time of service for a covered health care service. For example, if the copay for a doctor's visit is N2000 under your insurance plan, you will pay N2000 at the time of the visit regardless of the total cost of the visit.



What is a Deductible?

A deductible is the amount of money that a policyholder must pay out of pocket for certain covered healthcare services before their health insurance plan begins to pay for them. When the deductible is met, the insurance company will begin to cover a portion of the remaining costs (coinsurance). For example, if your insurance plan has a N10,000 deductible and you have already met that deductible for the year, your plan may cover 80% of the costs, leaving you to pay the remaining 20%.



What Is the Relationship Between Copayments and Deductibles?

One word sums up the relationship between copayments and deductibles: cost-sharing. Both are strategies used by insurance companies to share the costs of covered healthcare services with policyholders. Insurance companies can keep premiums (monthly payments) lower by requiring policyholders to pay a portion of their health care costs out of pocket.



Here are 5 key differences between copayments and deductibles.

1. A deductible is the amount of money you must pay for medical expenses before your insurance company will begin to pay. After your deductible has been met, you pay a set amount for a specific healthcare service.



2. A deductible applies to all medical expenses incurred during the course of the year. A co-payment is only valid for the service for which it was charged.



3. When you receive treatment, you must pay a deductible to the provider. Typically, a copayment is made at the time of service.



4. A deductible is only required once a year. Depending on how frequently you receive certain services, you may be required to pay multiple copayments throughout the year.



5. The amount of your deductible and copayments can vary depending on your health insurance plan.



roHealth provides health insurance plans that are tailored to your specific needs. If you are perplexed by the numerous options available or are unsure where to begin, roHealth can assist. We understand that selecting the right health insurance plan can be challenging, but we are here to assist. Now that you understand the distinction between these two terms, you can make an educated decision about which type of health insurance plan is best for you. roHealth is here to help you every step of the way. Contact us today to learn more about our health insurance plans.