Copayments or copays are a common form of cost sharing in many health insurance plans. cost sharing is simply the part of the costs that you pay out of pocket. Splitting the cost of medical services between the insurance company and the policyholder keeps your monthly medical bills in check.
If you are enrolled in coverage through a small business plan or group health insurance, your employer is generally not responsible for copays. copays are typically the responsibility of the policyholder.
Reading: How much is a copay with insurance
Understanding how this system works helps you make smart insurance decisions that fit both your health care needs and your budget. Here’s what you need to know about health insurance copays and other out-of-pocket costs.
what is a copay?
A health insurance copay is a fixed amount set by an insurance plan to share the cost of covered services between the plan and the client. The cost-sharing system is a critical selling point for each plan because it breaks down how much you’ll actually owe for services, prescriptions, doctor visits, and more.
It’s important to understand the cost-sharing details of any health insurance plan you’re considering, especially for frequently used services or prescriptions. keep in mind that these are out-of-pocket costs you’ll pay in addition to your monthly premiums and costs for non-covered services.
Cost sharing comes in three main forms:
- Copayment – This is a flat, fixed fee for certain types of office visits, prescription drugs, or other services. Because the health insurance copay is fixed, you’ll know exactly how much you owe ahead of time. If your policy includes a $25 copay for a doctor’s visit, you pay that amount each time you see the doctor.
- coinsurance: This is a percentage of the total cost of a covered medical service, rather than a set copay. If the insurance company owes a doctor $100 for your visit and you have 25 percent coinsurance, you’ll pay $25 for the visit. you can pay at the time of service or receive a bill from you after the visit.
- Annual Deductible – An annual deductible is a set amount you may be required to pay for covered health care within a single year. For example, if you have a $3,000 annual deductible, you may need to pay that amount out of pocket for covered health care before the insurance company starts paying your claims.
- visits to a primary care physician for non-preventive care
- office visits with a specialist
- physical therapy
- occupational therapy
- speech therapy
- office mental health services, such as physical therapy or drug counseling
- ambulance or emergency services
Generally, you’ll pay out-of-pocket in full for covered medical services until you meet your plan’s yearly deductible. After that, your insurance begins paying its share of the costs, and you may owe a copay or coinsurance for certain services as your “share.”
It is also important to note that certain preventive medical services may not have cost sharing. For example, annual preventive care checkups, certain screening tests, and childhood immunizations are generally not subject to copays, coinsurance, or deductibles. this means they are generally covered with no out-of-pocket costs.
what services have a health insurance copay?
The rules for health insurance copays vary by policy and provider. see your plan’s policy details for more information. you may owe a copay for:
As mentioned above, preventive care is generally exempt from cost-sharing thanks to the Affordable Care Act, so copays are generally waived for these office visits.
Please note that your plan may have provider network rules. your costs may be higher if you go out-of-network or use a non-preferred doctor or provider. If you go out-of-network, your copay or coinsurance costs may be higher, or you may have to pay the full amount for services.
Is your copay the same for all services?
The fixed amount you pay for a doctor’s visit, a hospital visit, an urgent care visit, or even a prescription drug will likely be different.
Your copay may differ based on the type of facility you visit, for example, a regular facility visit versus urgent care. the same applies to emergency room visits and specialty care. Standard care visits generally have the lowest copays.
Co-pay costs are typically higher for hmo insurance plans, but these plans can cost less month-to-month. Generally, the higher the copay cost, the lower your monthly cost. they can also make a difference if you have coinsurance instead of or in addition to your insurance copay.
copayments for brand-name drugs vs. generic drugs
You may also have a copay for certain drugs. however, generic drugs typically have a lower copay than brand name drugs. This means you can take generic brands that work just as well, if not better, than brand-name drugs, while paying less for your copay.
copays hmo vs. ppo: what’s the difference?
PPO insurance plans, also known as Preferred Provider Organizations, are a bit different from HMO or health maintenance organization plans. For starters, ppo plans tend to be a bit more expensive than hmo plans.
ppo insurance plans may also require you to pay a deductible before using your copay, while some hmo plans may not have a deductible at all.
in-network vs. out-of-network copay
While you’re free to visit any doctor of your choice, it’s good to know the difference between your in-network and out-of-network insurance copay. If you choose to see a doctor in your network, meaning one that accepts your type of health insurance plan, then you’ll pay an in-network copay, which is generally lower.
However, if you choose to see a doctor outside of your network, you will need to pay the copay set by the doctor and your insurance provider. these out-of-network copay rates may be higher and can be determined on a case-by-case basis. Fortunately, the Affordable Care Act has established rules to make health care, including copays, more affordable.
How does the out-of-pocket maximum affect copays?
Some health insurance plans have an “out-of-pocket maximum,” which is a cap on the amount you’ll pay for covered services each year. health insurance copays and other forms of cost sharing count toward this amount and are capped by the stated out-of-pocket maximum for the policy.
For example, if your plan has an out-of-pocket maximum of $6,500, once your contributions reach that amount, you will stop paying cost-sharing amounts. From then on, your plan must cover all of the costs for the rest of the year for covered services.
what is the average cost of a copay?
a recent kff survey found that the average cost of a copay for a regular doctor’s visit is around $25, while a copay for a visit to a specialist is around $42. This will depend on the type of care you need, the doctor you see, and the insurance plan you have.
when do you pay your copay?
Most doctor’s offices will require you to pay your copay before you come into the doctor’s office. when your appointment day arrives, you will be asked to pay by debit, credit, or cash before being seen. if you pay for a drug, you will usually pay for it at your pharmacy register.
does an hsa cover your copay?
Although you can use the money in your health savings account (hsa) to cover medical expenses, such as copays, keep in mind that in most cases, you will only have access to an hsa if you have a plan health plan with high deductible or hdhp .
Which plans require a health insurance copay?
copayments are more common with managed care plans, like hmos. Insurance companies that offer these plans have contracts with health care providers that allow them to pay flat rates for essential services. this makes it easier to predict overall costs and offer a cost-sharing structure to consumers. however, it is also possible to find other plans (such as ppos) that incorporate copays into their cost-sharing structure, in addition to annual deductibles or coinsurance.
Cost-sharing plans offer benefits to both insurance companies and members. the structure allows insurance companies to keep costs down and helps policyholders know in advance how much they will have to pay for each service.
find a health plan that fits your budget
according to the kaiser family foundation, about half of the u.s. uu. adults say they struggle to pay for health care costs. that doesn’t have to be you. It’s a good idea to shop around and compare the cost-sharing details of the plans you’re considering.
If you need help finding a health care plan that fits your budget, has lower copay options, and fits your health needs, use our search tool. As a licensed insurance broker, eHealth offers a wide selection of health insurance plans from trusted companies. If you want more information about cost sharing or help finding a health plan that fits your health needs and budget, our support staff is here to help.