What is Copay?

A copay is a fixed amount of money you pay for services covered by your health plan. It is one of the costs you will commonly find detailed in your existing or desired health plan. Having a copay means your costs for covered services will remain the same. Much like coinsurance, copay is your share of the cost of the bill. Copays are usually paid at the time you receive the service. Let’s dive into how copays work, and what it means for your total costs of care.

How does copay work?

When you receive medical care for covered services, you will share a portion of the cost.  Copays vary based on the service, plan and provider. Commonly, copays for primary care are lower, while specialty care tends to have higher copays. Common examples of medical services that require a copay are:

• A visit to the doctor, or primary care
• Prescription drugs
• Labs & blood tests
• Hospital stays
• Specialty care

Not all services have copays. Some plans or services can have no copay, meaning your insurance provider will cover full costs of services. Other times, you may see a copay for the amount of $20, for example. This would mean that when you receive the related service, you would pay $20, and insurance would cover the rest of the bill. 

This copay would be required for each service received after your deductible and before your out-of-pocket maximum is met. Multiple doctors visits in a year would each require their own copayment.

How do copays work with my deductible?

Until you have met your deductible, you pay for the full costs of services received. Insurance does not begin to pay for covered services before you have met your deductible. This means that before your deductible is paid, your costs will be more than just your copayment.

However, once you have met your deductible, insurance pays their share of the costs. This is the time that your copayment takes effect. At this time, your costs go from being full costs of service to the fixed copayment amount set by your health plan.

How do copays work with my out-of-pocket maximum?

Copayments contribute towards your out-of-pocket maximum. Upon meeting your deductible, you will pay copays and coinsurances until your out-of-pocket maximum is met. Once you have paid up to your out-of-pocket maximum, you will no longer be required to pay copayments. Your insurance provider will cover all following medical claims.

As an example, say you have a deductible of $2,000, a $35 primary care copay, and an out-of-pocket maximum of $4,000. You would first pay full cost for services up to your $2,000 deductible. After having paid $2,000, you will pay $35 for each visit to your primary care provider. Then, once you have paid up to a sum total of $4,000, insurance covers 100% of all care following that $4,000. The amount paid towards your deductible also counts towards your out-of-pocket maximum.

Pros and Cons of Copay

The biggest advantage to having a copay is that your upfront costs are often very affordable. When compared to co-insurance, the difference between your share of costs could come out to even a couple hundred dollars. Copays make getting medical care much more affordable and accessible for the average individual.

However, the main downside to copayments is that they contribute very little towards your out-of-pocket maximum. Many policyholders end up not meeting their out-of-pocket maximums, and have to share costs for all services throughout the year. For some, especially those with high deductibles, this may mean you pay more for your healthcare in a year than your insurance.

In- vs. Out-of-Network Copay

While some plans may offer some out-of-network coverage, not all do. Out-of-network coverage can vary greatly in availability and costs. However, even when covered, out-of-network care tends to cost the policyholder more. Deductibles, copayments and coinsurances all are typically higher for out-of-network care. Your costs before the deductibles, and costs shared after the deductible, will all be higher.

To get an understanding of your out-of-network coverage and costs, check your plan details.

What does copay mean for me?

When you understand your copayments, you understand what your financial responsibilities will be for medical care. It will help you understand how your health plan works and is used. Those who understand their costs and responsibilities can better plan for the future. By having a knowledge of your costs & responsibilities, you are more in charge of your own health care.

If you have any questions about copayments, your health plan, or anything else, give us a call. Health Plan Advocates is here to advocate for your health and get you the best plan for your needs. We offer free, no-pressure consulting services to help you compare between the plans available in your area. Additionally, we are licensed in all 50 states with all trusted providers to be able to best serve you. Reach out to us for any and all help you need with your health plan!