Co-pay is nothing but bearing the cost of the claim amount, as per the pre-agreed amount or percentage, when you make a claim in your policy. Some insurers offering you health insurance plans will have a mandatory co-pay clause wherein you are bound to bear the defined percentage of the claim amount on each and every claim. It applies to all the claims you file in the policy period.
For Example, if the co-pay clause says 10% to be borne by you, so for Rs 10000 as a claim amount, your insurer will pay Rs 9000, and you have to pay Rs 1000 in such scenario.
The plans with higher co-payment will have lower premiums as the risk, and money is shared between the insured and the insurer whereas plans with no co-payment clause will have higher premiums as the insurer is taking the risk to bear entire amount of the claim.
It is advisable to go for plans that come without restrictive options, such as co-payments, limits on room rents and treatment-specific limits. They may cost a little more but evade financial risk during emergencies.