What Is an Insurance Copay?

Health care and insurance costs are rising for both policyholders and insurance companies. Every dollar counts. Many people rely on health insurance to help pay for routine, preventative, and emergency medical treatment. Millions of Americans also depend on insurance to help pay for prescription medications.

One way insurers can control costs is through the use of copays. Insurers use copays to prevent abuse of insurance policy benefits. Copays help address unnecessary or overly expensive insurance claims. They can also help bring down premium costs.

Policyholders pay a portion of the health care costs. A copayment represents your responsibility for your medical care costs.

Read on to learn more about the role of a health insurance copay and how it works with other health care costs.

Copays Defined

A health insurance copay or copay amount is a fixed amount that insureds pay out-of-pocket for covered medical expenses. Some health insurance plans require insureds to pay an out-of-pocket cost. Copays are a specific dollar amount, not a percentage of the total cost of the medical bill.

When Do You Have a Copay?

Some insurance policies pay 100% of the cost of certain types of care, like annual check-ups and preventative care. For such visits, you wouldn't have to make any copayment.

However, policyholders can be required to pay this out-of-pocket expense. Your plan may outline copay amounts for different health care services, such as:

• Doctor visits (including annual check-ups and visits to specialists)
• Health care screenings
• Prescription drugs
• Emergency room visits
• Lab tests

The amount of the particular copay can vary based on the type of care visit. For example, you may have a lower copay for a routine visit to your primary care physician and a higher one for an urgent care visit. You may have one copay amount for a network provider and a higher copay for an out-of-network health care provider.

When Do You Pay the Copay?

Copays are typically paid upfront at the time of service. The amount of your particular copay is sometimes printed directly on your insurance card. If not, check with your health insurance company or review your policy documents.

Copays for other doctor's office visits typically cost around $25 or less, while copays for emergency room visits tend to be higher. In-network or preferred providers may require a lower copay.

Interplay Between Deductibles, Premiums, and Copays

It's helpful to understand copays, deductibles, and premiums. Premiums, copays, and deductibles determine how you and your insurance company engage in cost-sharing. Policyholders and insurance companies share responsibility for paying for medical services.

Do Copays Count Toward Your Deductible?

A copay is a flat fee that you may be required to pay out-of-pocket after you've paid your annual deductible. Deductibles impact copays.

An insurance deductible is a set amount that you must pay under your insurance policy before your health insurance begins to pay. If you have a higher deductible under your policy, you will likely have to pay for most minor services until you reach your deductible. If you still need to meet your deductible amount, you'd pay the entire amount allowable for the medical service.

After that, if your policy covers the expense, you're only responsible for the copay. Your insurance company will cover the rest. However, you must meet your out-of-pocket maximum for the deductible before your only responsibility is a copayment.

How Do Premiums Impact Copays?

Premiums impact copays. An insurance premium is the amount of money a policyholder pays the insurance company in exchange for insurance coverage.

Typically, if you have a plan with lower monthly premiums, you will have a higher copay. Plans with a higher monthly premium will likely have a lower copay.

Get Legal Help With Copay or Insurance Issues

Health insurance can be a financial and medical lifeline. However, conflicts with insurance companies happen and are often complex.

If your insurance company has declined coverage or charged a copay inconsistent with your insurance policy or contract, seek help. An experienced insurance lawyer can explain your legal options. FindLaw can help you find an experienced insurance lawyer in your area.