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How to Choose the Right Co-Insurance for Your Health Insurance

An co-insurance is the fixed percentage you pay toward the cost of bills for out-patient and pharmacy treatment. The higher the co-insurance, the lower we can set your premium. You must choose one when you first apply for your health plan. In this article we cover everything you need to know about co-insurances and how they apply to your international health insurance cover.

What is a co-insurance?

Your co-insurance is the amount you contribute towards your medical bills for out-patient treatment and pharmacy costs.

Let’s say your health plan has a 10% co-insurance. You pay your insurance premium as usual, and you go about your life safe in the knowledge that you have cover for private healthcare. When you visit a hospital or doctor and you incur a charge for out-patient treatment, you’ll pay 10% of your bills. We’ll pay the remaining 90% of the bills.

What’s the point of health insurance if I have to pay part of the bills?

Co-insurances might seem a little strange at first. After all, isn’t medical insurance supposed to pay for your hospital bills?

Yes, of course, but that’s not quite the full picture. Co-insurances can help insurance companies and customers alike.

  • Co-insurances help insurance companies reduce the amount of risk they’re exposed to by an insurance policy.
  • In return, insurance companies translate that risk reduction into premiums savings for the customer buying the policy.

Health insurance companies receive millions of claims for medical treatment each year. Most of these claims are for relatively low-cost treatments such as doctor visits, specialist consultations and pharmacy prescriptions. These small claims certainly add up. Of course, a complex claim for cancer treatment at a private hospital can cost millions of dollars. But most of the claims that health insurance companies pay out to customers are for minor treatments.

A co-insurance means health insurance companies pay out less for high-frequency but low-cost claims. Fewer claims save money for the insurance company. But it also saves time so claims advisers can focus attention on claims for serious, long-term medical treatment.

Most importantly, insurance providers ought to pass on the savings to customers. At William Russell, that’s the approach we take. We know that insurance doesn’t have the best reputation, but we’re doing our best to change perceptions. We’re completely transparent on how co-insurances work and how they can save you money.

Below, you’ll find information on our co-insurance options and a couple of strategies for picking the right co-insurance for your needs.

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What is a ‘nil co-insurance’?

When you first start thinking about health insurance, you probably just want a policy to pay for your private healthcare. So, what’s all this about co-insurances? Why have an co-insurance if your co-insurance is the amount you contribute to your private healthcare costs?

Counter-intuitively, not having an co-insurance is unpopular with our members. Why? Having a no co-insurance means more expensive premiums.

The logic behind calculating premiums for health insurance is somewhat complicated, but most models start with a baseline (or ‘base premium’, as it’s known). When calculating base premiums, insurance companies’ price using the most basic version of their plans (i.e., a standard-issue plan with no optional benefits or other add-ons).

Insurance companies also tend to calculate base premiums using the nil co-insurance. They calculate discounts for higher co-insurances against the standard, nil co-insurance. On our plans, the difference in premium between the nil co-insurance and the next highest available co-insurance (10%) can be considerable.

So co-insurances are nothing to be afraid of, and most of our members have one on their plan quite happily.

How do co-insurances work with direct billing for everyday medical care?

When you become a member, we issue you with a membership card that states your co-insurance. When you attend a hospital or clinic in the UAE, just present the card and the clinic will know to charge you for the amount of your co-insurance.

Notes on the health plans

You won’t find complete information for our plans on this webpage, nor the full T&Cs, limitations, and exclusions that would apply if you purchase one. You can find complete information in the plan agreement, which we suggest you read together with this webpage. All the benefits on this webpage are per member per period of cover, unless we state otherwise. We show the benefit limits in US dollars and dirhams, but your plan is denominated in dirhams only.