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A copay, or copayment, is a fixed fee you pay for a service covered by your health insurance plan. For instance, you may have a copay of $20 for a medical office visit or $10 for a generic prescription drug.
Copay costs vary by plan, and not all plans use copays. Copays are generally lower for using in-network providers and services and higher if you go out of network for care.
How does a copay work?
A copay is a fixed amount you pay each time you get a specific medical service or see a specific provider. It's different from coinsurance, which is when you pay a percentage of the approved charges.
- Copay: You pay a flat fee (like $25) every time you see a provider. You pay at the time of service or when you fill a prescription.
- Coinsurance: You pay a percentage of the provider’s bill (like 20%), but you don’t pay when you receive services — you’re billed by the provider once insurance approves the charges.
You might have different copays for services such as the following:
- Office visit to see your primary care physician.
- Office visit to see a specialist.
- Urgent care visit.
- Emergency room visit.
- Generic prescription drug.
- Brand-name drug.
- Physical therapy visit.
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Copay vs. deductible
The annual deductible is the amount you pay toward covered medical services before your insurance starts paying for its share. For instance, if your deductible is $1,500, you’ll have to pay $1,500 out of pocket for covered medical care before your insurance starts covering anything.
You may or may not have to pay copays for services before you reach your deductible. If you pay before hitting the deductible, the amount may count toward the deductible (although it often doesn’t), but it always counts toward your maximum out-of-pocket limit on that health plan. The maximum out-of-pocket limit is the most you’d have to pay in one year for covered medical care.
Copay vs. coinsurance
While a copay is a set cost you pay for specific services, such as $25 to see your primary care physician, coinsurance is a percentage of the cost of services, such as 40% of an emergency room visit.
What is a typical copay?
Copays vary according to the kind of service you receive. You may pay as little as $10 for a visit to your primary care physician and as much as $300 for an emergency room visit.
That said, health plans with copays have fallen in popularity in recent years as more plans use a model with a deductible and coinsurance. Copayments now account for a much smaller percentage of cost sharing than deductibles.
What does a $25 copay mean?
A $25 copay means you’ll owe $25 for a type of medical service. For instance, if your health insurance plan says you have a $25 copay for seeing a specialist, you’ll pay $25 out of pocket for that appointment.
What doesn’t require a copay?
Most health insurance plans are required to cover certain preventive services without a copay or coinsurance. This list includes services such as the following:
- Annual checkups.
- Blood pressure screening.
- Immunizations.
- Depression screening.
- HIV screening.
- Breastfeeding support and counseling.
- Cervical cancer screening.
- Well-woman visits.
- Well-child visits.
Check your own policy to find out which services do and don’t require a copay.
Is it better to have a copay or deductible?
Copays and deductibles are different types of costs for a health insurance plan. A deductible is the amount you must pay out of pocket before your insurance starts covering care, and the deductible resets each year. In many cases, health plans with lower monthly premiums have higher deductibles, and vice versa. Some plans have no deductible.
Copays are fixed fees you pay for certain kinds of services, such as an office visit or a trip to the emergency room. You may owe copays for services before you hit your deductible, or you may pay copays only after you’ve reached your deductible.
The cost structure that works best for you will depend on your budget and your health insurance needs.
Do you still pay copays if you meet your deductible?
This will depend on your health plan, but in some cases, you’ll have to meet your deductible and then you’ll owe copays or coinsurance for additional doctor visits and medical services. If your plan has no deductible, you’ll owe copays or coinsurance from the start.
Is it better to have a copay or coinsurance?
This will depend on your health care needs and how your plan is structured. Copays can add up, but coinsurance may be more expensive, depending on the total cost of a visit or service. For instance, you might have a $25 copay to see a specialist, or you might have a 20% coinsurance requirement. If that specialist visit costs $200, the coinsurance would be $40. You’ll have to think about how you generally use health insurance.
