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What is a Health Insurance Copay?

Healthcare Writer

Last updated August 6th, 2020

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You’ll know this question if you’ve ever finished a doctor’s appointment – “what’s your copay?” A doctor or receptionist has probably asked you about your copayment before you left.

Copayments, or copays, are a pre-set amount that you pay for certain medical services.

Learn about: Copay Examples  |  Average Copays  |  Common Copay Services  | Finding Your Copay  | Copays vs. Other Terms  |  Copays On 2 Plans

copayment illustrated definition

Copays are considered an out-of-pocket cost. You’ll make these smaller payments after you reach your higher deductible (that’s the annual amount you pay for services on your own before your health plan begins to help).

Copays do not depend on the sticker price of a medical service. Any copayment for a certain procedure should cost the same, no matter which in-network doctor you choose.

Your health insurance plan sets the copay amount, but it’s easy to understand what a copay actually is. Copays and copayments are two names for the same thing – a flat fee to get healthcare.

How Do Copays Work? An Actual Copayment Example

Many health plans ask for copays during basic doctor visits.

If you hurt your foot and visit your family doctor, you’ll pay a copay for the visit – say $30 – while your plan covers the rest.

If you visit a specialist doctor (like a podiatrist) for your foot, then you might pay a higher amount – like $50. Once again, your plan will cover the rest of the initial visit.

The Same Price for Any Doctor: Let’s say that there are two doctors in your health plan’s network. Imagine that one doctor charges $250 for checkups, while another doctor charges $125.

If you see both doctors – and your copay for routine visits is $20 – then you’ll owe a total of $40. The remaining costs ($230 for one doctor and $105 for the other) will simply be paid by your insurance company.
demonstration of how copays work

Average Copayments: How Much Can You Expect to Spend?

Copays Per Visit: Generally, an in-network insurance copay for a family doctor is between $20 and $50 per visit. Copays for specialists can be anywhere from $20 to $100.

Common procedures can come with a copay. Standardized tests like x-rays frequently have a copay. Prescription drugs can have copays, even if you’re picking them up from the pharmacy.

Copays Per Year: The most recent studies report that the average person spends about $148 per year on copays. This has been largely the same since the beginning of ACA health insurance in 2014.

Average spending on copays has declined every year since 2010. That’s because of increasingly high health plan deductibles. In fact, the share of health expenses covered by copays has dropped from a high of 56 percent in 2004 to 19 percent in 2017.

Typical Copayment Services

Copayments are billed for smaller, routine expenses. Your annual checkup or your inhaler might be subject to a copay.

Standalone services like an EKG heart test or allergy shots, which are performed similarly for each person, may use copays as well.

Services Without Copays:

Visits to handle a chronic illness may be treated differently by different experts – and they usually come with higher prices.

The more intense or severe the issue, the likelier that it won’t rely on copays. A complex medical condition won’t come with a certain cost.

Expensive diagnostic tests like MRIs or gallium scans also tend to be provided on a coinsurance, not copay, basis. They may also have a high copay.

You won’t find copays for most hospital visits. Some HMO networks may be set up to do this, but inpatient care is largely covered with coinsurance.

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Where Can You Find Copayment Amounts?

You don’t need to memorize your copayment amounts. Just looking at them once in a while will demystify your basic healthcare costs. You can check for copayment amounts in two places:

1. Your insurance card

A typical insurance card will list copays for common services. Office visits, urgent care, and ER prices are frequently found on pocket cards.

Any dollar amounts printed on your card likely refer to your copay.

2. Your Summary of Benefits and Coverage

Your Summary of Benefits and Coverage (SBC) explains the basic rules for your health plan. This is where you should look to find copay or coinsurance amounts for very specific services.

You can expect to receive an SBC in the mail. Your health insurance plan can also provide you with an SBC on its website, or list its prices over the phone.

How Copays Work With Key Health Insurance Features

Copayments can seem like other parts of your health plan. Here’s how to understand what makes copays different.

Deductibles vs. Copays: Are Copayments Deductible?

When you first start to use your health insurance, you’ll pay attention to your deductible. A deductible is an amount you pay on your own before your health plan contributes to your medical care.

Most payments, including copayments, are “deductible” because they help reach your plan’s annual deductible.

“Copay after deductible” means that, unfortunately, you have to pay for a service in full until you reach that annual deductible.

However, many health plans help pay for certain services before you reach your deductible. Preventive care and specialist visits for chronic conditions commonly skip your deductible. If these visits include a copay, then that copay will still help chip away at your deductible.

Copays and Coinsurance

Copayments are a flat fee for medical services. Coinsurance is a fixed percentage.

copays vs coinsurance, dollar being stretched

It’s no wonder that most people have difficulty telling the difference between copayments and coinsurance. Their names are confusingly similar, and they also come into play at similar times.

On many occasions, you’ll pay copays and coinsurance at once. For complex services, you’ll be billed for both at the same time, although you may not have to send in your coinsurance right away. This happens when you pay a copayment first, then coinsurance applies to the remainder of your bill.

Some people try to avoid copays, but you’d probably rather avoid coinsurance.

Copays vs. Premiums

Your premium is what you pay each month to keep your health insurance plan active. Your health insurance usage doesn’t affect your premiums.

On the other hand, copayments are entirely tied to health insurance usage. You’ll have copays each time for certain services. You may need to pay copayments several times in one month, or zero times in an entire year.

Copays and Out-of-Pocket Maximums

Your health plan will pay 100 percent of your bills after your combined out-of-pocket spending for doctors, drugs, and other services reaches your maximum out-of-pocket level (MOOP).

Once you reach your maximum out-of-pocket spending for the year, you won’t have any copayments.

Copays are a classic out-of-pocket cost. That means they will count towards your maximum out-of-pocket spending level. Every bit helps when reaching this level. That said, copayments won’t get you very far towards reaching your plan’s MOOP unless it’s very low.

Health Savings Account (HSA) Copays

Yes, HSA copay contributions are possible. You can submit copayments for covered medical services with your HSA.

Certain health plans (particularly high-deductible health plans) work well with an HSA. HSAs and FSAs are ways to pay for tax-deductible medical care in an account that earns interest. HSAs themselves do not require copays to use.

Copays and Plan Types

Your health insurance plan will use a doctor network. Health insurance networks involve which doctor you can see. Health insurance plans deal with the type of coverage that you have.

Copayments are traditionally most common in HMO networks. Almost all networks make use of copayments, though. All plan types, including Obamacare, can use copays too.

Copays and Medicare

Medicare, the nationwide insurance program for seniors and disabled people, has many differences from traditional health plans. But copays are one Medicare idea that doesn’t take getting used to.

All Medicare components- Part A, B, C, and D – use copays in some way. A Medicare Supplement plan pays Part A and B copayments.

Copayments and Government Programs

Rules for Medicaid, the national low income health program, depend on your state’s version of Medicaid. Some states need small copay amounts for services, while other states have no copays at all.

Drug Copayments

Yes, your health plan will almost certainly use drug copays.

Health policy researchers found that first tier drugs (generic drugs in a health plan) had an average copayment of $11.

Fourth tier drugs (the most expensive level) came with an average copayment of $111.

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Do You Still Pay Copayments if You Have 2 Plans?

If you have two insurance plans, you can coordinate benefits between each of them. This depends on the rules of each health plan.

Each plan will almost certainly ask for a copay, so paying one copay with another plan isn’t practical.

Why Does Health Insurance Have Copayments?

Health insurers have a technical term for small out-of-pocket payments: “skin in the game”.

In other words, the idea of owing a small amount makes you responsible for your visit, while still keeping healthcare affordable. Copays keep people from overuse of medical facilities, without stopping necessary care.

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