What is a Copay?

Find out what a copay is and how it affects you financially.
What is a Copay?

A copay (or co-payment) is the part of a medical bill that you pay out of your own pocket. Copays are typically required for services such as doctor's office visits or emergency room visits. The amount of the copay depends on your health insurance plan and the type of visit. You will usually pay your copay directly to the hospital or service provider.

How Does Copay Work?

When you have health insurance, you pay monthly premiums to maintain your coverage. If you need medical services, such as visiting a doctor for a bad cough, you may still be responsible for a small fee even if your doctor accepts your insurance. This fee is your copay for the visit. The copay amount for a specific type of service will always be the same, regardless of how many times you receive that service.

When Might I Have a Copay?

Depending on your health insurance plan, health insurance companies can require copays for various types of services or expenses. Examples of bills you may have a copay for include:

  • Prescription medications
  • Emergency room visits
  • Urgent care visits
  • Visits to your primary care provider
  • Visits to a specialist (cardiologist, pediatrist, etc.)
  • Surgery
  • Hospital admissions
  • Labor and delivery
  • Medical equipment
  • Oxygen services
  • Home health
  • Lab tests
  • CT Scans
  • X-rays

Make sure to review your insurance documentation for specific details about copay requirements and the specific services involved. Generally, plans with higher premiums will have lower copays and vice versa.

What’s the Difference Between Copay and Co-Insurance?

Unlike copayments, coinsurance is a percentage of the medical bill or healthcare expense that you will owe. Here are the key differences:

  • Copay: A pre-determined and fixed amount you pay for a specific service, such as a $40 copay for a doctor's office visit.
  • Coinsurance: A fixed percentage of the total cost of the service. For example, with coinsurance, you might pay 20% of the entire bill for a doctor's office visit, rather than a flat $40 copay.

Understanding these differences can help you better manage your healthcare expenses.

Copays and Deductibles

With some insurance plans, you may have to pay the entire medical bill until you meet your deductible. The deductible is the amount you must pay out of your own pocket before your insurance coverage kicks in. Deductibles are usually calculated on an annual basis and can vary between individual and family plans.

For instance, some health insurance plans may require you to pay $2,500 of your own medical expenses as a deductible. The insurance company keeps track of the running total you have paid. Once you meet this amount, you may only be required to pay your copayment or coinsurance amounts for subsequent services.