A copay is a flat fee that you pay when you receive specific health care services, such as a doctor visit or getting prescription drugs. Your copay (also called a copayment) will vary depending on the service you receive and your health insurance plan, but copays are typically $30 or less.
Copays are a form of cost sharing. Insurance companies use them as a way for customers to split the cost of paying for health care. Copays for a particular insurance plan are set by the insurer. Regardless of what your doctor charges for a visit, your copay won't change.
Not all services require a copay — preventive care usually doesn’t — while the copay for other medical services may depend on which doctor you see or which medicine you use. In particular, certain insurance plans charge more to visit a specialist physician instead of your primary care physician. Name brand prescription medicine usually has a higher copay than generic versions.
As a general rule, health insurance plans with lower monthly premiums (the amount you pay each month in order to have health insurance) will have higher copays. Plans with higher premiums usually have lower copays.
Copays vs coinsurance
Copays and coinsurance are two ways that insurance companies share costs with customers, but they differ in both how and when they apply.
As mentioned, a copay is a set amount of money that you pay when you receive a certain service. The amount of your copay varies based on the service. An office visit for your primary care physician may have a $20 copay, while filling an order for prescription drugs may have a $25 copay. No matter how much the doctor or provider charges for the service your copay is the same.
On the other hand, coinsurance is charged as a percentage instead of a flat fee. For example, let’s say you have coinsurance of 20%. That means you need to pay 20% out of pocket, and then your insurance will cover the other 80% of the bill. (This is also referred to as 80/20 coinsurance.) Your coinsurance will also apply in addition to your copay.
Another important difference is that copays may apply regardless of whether you’ve met your deductible, but you only pay coinsurance after you’ve reached your deductible or if you see an out-of-network provider. The major exception is if you have a zero-deductible plan, which will always require you to pay coinsurance.
Before you hit your deductible, you will have to pay out of pocket when you go to the emergency room or if you require urgent care, like a medical procedure. (If you need care to treat a life threatening situation, your insurance will cover the cost because of the essential health benefits that Obamacare requires insurers to cover.)
The following table highlights some key differences between a copay and coinsurance.
Copay | Coinsurance | |
|---|---|---|
How is it charged? | Flat fee per service | Percentage of costs |
Does it change? | Yes, it can vary by type of service | No, the percentage is always the same |
When do you pay it? | Before and after you reach your deductible | After you reach your deductible and for out-of-network medical expenses |
Does it count toward your out-of-pocket maximum? | Yes, in most plans | Yes |
Copays vs deductible
Outside of clinic visits and preventive care, certain medical procedures are subject to a deductible. Your health insurance deductible is the amount of your own money that you need to pay for those procedures before your insurance company will step in to pay for some of your medical expenses.
A high deductible means you pay more yourself before your insurance steps in. What expenses count toward meeting your deductible may vary by plan, but copays do not usually count toward your deductible.
Learn more about deductibles.
Copays vs deductible
Outside of clinic visits and preventive care, certain medical procedures are subject to a deductible. Your health insurance deductible is the amount of your own money that you need to pay for those procedures before your insurance company will step in to pay for some of your medical expenses.
A high deductible means you pay more yourself before your insurance steps in. What expenses count toward meeting your deductible may vary by plan, but copays do not usually count toward your deductible.
Learn more about deductibles.
Copays and out-of-pocket max
Your out-of-pocket maximum, also called your out-of-pocket limit, is the maximum amount you will have to pay on your own for medical expenses if you have health insurance. Once you hit that spending amount, your insurer will take over to cover the rest of your costs for the calendar year. Your spending towards the limit will reset once a new year starts.
Copays do count toward your annual out-of-pocket maximum since they are all out-of-pocket expenses. You don’t usually have to make copays after you hit your maximum, but this varies by plan. Check the details of your specific plan for more information.
Learn more about what counts toward your out-of-pocket maximum.
Copays with Medicare and Medicaid
If you have Medicare, the federal health insurance program for people who are older than 65 or have certain disabilities, you can generally expect to pay less in copays than you would pay for private health insurance or other individual plans from the marketplace. Prices vary by plan but your copays, like for a prescription drug, could be less than $5.
Medicaid plans vary by state, so you should check your individual plan to see what the copays are. However, copays with Medicaid are generally much smaller than they are with other plans. For example, in New York, the copay is $3 for visiting a clinic or getting a brand name subscription.
Read more on who qualifies for Medicaid in our state-by-state guide to Medicaid.
