Copays Amounts Can Vary
Copay amounts depend on your plan and may vary for different types of services, such as visits to a general practitioner, specialist examinations, lab tests, and prescriptions. A copay might be higher for a specialist visit than for your primary doctor. Services such as annual physicals or wellness exams may not require a copay. Copays are often a key factor in choosing a health insurance plan because they can help you plan for your medical costs. When you’re reviewing health insurance options, consider the total costs of each plan, including copays, coinsurance, and deductibles, as well as your monthly premium.
Annual Deductible
If your plan has an annual deductible, copays generally take effect only after you’ve paid it. That means you must pay all health-related costs out of your pocket until you reach the annual deductible amount. Once you’ve met your deductible, your insurance plan kicks in and pays all or a portion of your medical expenses, depending on the level of coverage within your insurance plan.
Example of a Copay
Suppose your insurance plan’s copay for each primary doctor visit is $20, you’ll owe $20 at the time of the appointment. Your doctor refers to a specialist, and when you arrive for the appointment, you have a specialist copay of $50 to be paid before services are rendered.
Copay vs. Deductible
For example, say your health insurance has a $1,000 deductible and a $20 copay for visits to your primary care physician. You need to see your doctor, which costs $100. If you’ve only spent $200 on health care so far this year, you’ll be responsible for the full cost of the visit ($100). But if you’ve already met your deductible by spending more than $1,000 on health care expenses, you’ll just owe a $20 copay. Choosing a higher deductible often means you’ll pay lower monthly premiums and vice versa.
Copay vs. Coinsurance
Coinsurance varies by plan, but a common formula is 80/20. That means your insurance provider pays 80% of the cost of the visit, and you pay 20%. Here’s how coinsurance works: Let’s say you meet your deductible in April and then require a minor surgery in May that costs $2,500. Since you met your deductible, the surgery will be covered by coinsurance. If your plan’s coinsurance is 20%, you’ll need to pay $500, and your insurance company will cover the remaining $2,000. Some plans require you to pay both copays and coinsurance, especially if a visit includes more than one service. In the example above, you might have a copay of $20 in addition to the $500 coinsurance amount, for a total of $520. A copay is usually a much smaller amount than the deductible and is a fee due at the time of a medical service appointment or prescription purchase.
