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What Is a Copay or Copayment?
A copay is a fixed dollar amount a patient must pay upfront for medical services as part of their health insurance coverage. Health insurance plans often require you to pay a flat fee for a covered service, such as a doctor's appointment, lab test, or prescription. However, your copay—or copayment—can vary depending on the service, meaning you might owe a $20 copay for visiting your primary care doctor and a $50 copay for a medical imaging test.
KEY TAKEAWAYS
- A copay is an upfront fee you must pay out of pocket for services, such as prescriptions, lab tests, and visits to a doctor or an emergency room.
- Health insurance providers may require a copay for a specific dollar amount due at the time of an appointment or service.
- As an example, your health insurance provider might require a $30 copay for a doctor's visit and a $50 copay for tests, such as an X-ray.
- Not all medical visits require copayments, and copays can be higher for out-of-network visits versus in-network providers.
How a Copay Works
Copay fees are part of the cost-sharing for healthcare services between patients and health insurance providers. A copay is an upfront fixed amount that the patient must pay out of pocket at the time of service.
Below are examples of healthcare situations that may require a copay or copayment:
- Primary care doctor appointment
- Prescription purchase
- Lab test or blood test
- Hospital stay
- Imaging tests, such as an X-ray or MRI
- Specialist appointments, such as a cardiologist or oncologist
Although copays are typically a small fee—and not a percentage of the healthcare cost—they can vary among insurers and the type of medical service. In other words, your copay might be higher for a specialist appointment or hospital stay versus a routine check-up with your primary care physician.
Not all medical services require a copay. For example, some insurance companies do not require a copay for annual physicals. However, insurance providers may charge higher copays for appointments with out-of-network providers. As a result, be sure to check your insurance plan for how much out-of-network providers charge for copays, especially if you make recurring visits.
Example of a Copay or Copayment
Let's say that Jane has recurring back pain and visits her primary care doctor, which requires a $20 copay for the visit. The doctor refers Jane to a specialist, and at the time of the appointment, Jane's insurance requires a $50 copay to see a specialist.
Later that month, Jane visits the emergency room for back pain, where she is charged a $100 copay. The next day, Jane goes to her local pharmacy to pick up the medication prescribed by her specialist and pays a $10 copay for the prescription.
Copay amounts can change annually. Be sure to check with your health insurance provider or HR department at the start of a new year to determine if your copays have increased.
How Do Copays Affect Insurance Premiums?
Your monthly insurance premium is the amount you pay to keep your health insurance plan active. Typically, plans with relatively high premiums come with lower copayments, while plans with low monthly premiums come with higher copays.
How Do Copays and Deductibles Affect Each Other?
A deductible is the portion of your healthcare costs that you're responsible for paying out of pocket each year. The insurer will not pay a claim until your deductible has been paid or used up.
For example, if you have a $5,000 annual deductible, you must pay for all medical expenses each year, including prescriptions, lab tests, and doctor visits, until you've paid $5,000. Once you've paid $5,000 out of pocket, your health insurance covers your healthcare costs. However, you will owe a copay if your insurance plan requires it.
For example, let's say your copay is $20 per medical visit. You see a physician, and the appointment costs $200. If you have not reached your deductible, you would pay for the entire appointment or $200. However, if you have reached your deductible, you will pay the copay of $20.
If you have family coverage, every family member will have a copay for their medical visits unless it's not required, such as for an annual physical.
Deductibles and copayments are two different payments to your insurance company.
How Do Copays and Coinsurance Work Together?
Coinsurance is another out-of-pocket expense you might be required to pay for your health insurance coverage. Rather than being a fixed fee amount, as with copays, coinsurance is a percentage of the total visit cost. In some cases, health insurance policyholders pay both a copay and coinsurance for the same medical appointment.
For example, imagine you receive a filling from a dentist. Your health insurance plan requires you to pay a $20 copay for every dental appointment and a 20% coinsurance fee for fillings. If the dentist visit costs $200, you would owe a $20 copay and a $40 coinsurance fee (0.20 * $200) for a total of $60 for the appointment.
If your health insurance has a deductible and coinsurance, you must first satisfy the deductible by paying 100% of your healthcare costs. Once your deductible has been met, you'll pay the percentage of coinsurance for any covered healthcare services.
What Does it Mean When You Have to Pay a Copay?
A copay is a fee that you must pay upfront for a doctor's visit or if you purchase a prescription. For example, if you visit your primary doctor, you might have to pay $20 at the time of the visit.
What Is the Difference Between a Copay and a Deductible?
A deductible is an out-of-pocket cost for your healthcare costs that you must pay annually before your insurance will pay for any medical bills or prescriptions. For example, if you have a $1,000 deductible, you must pay all healthcare costs until you've paid $1,000, after which your insurance kicks in. A copay is a flat fee you pay out of pocket for services, like appointments and lab tests after you've paid your deductible.
What Does a $100 Copayment Mean?
A $100 copayment or copay is a flat fee that the patient must pay for a covered service by an insurer. For example, if you have a $100 copay for tests like an X-ray, you must pay $100 at the time of the exam.
The Bottom Line
A copay is a fixed dollar amount that health insurance providers require patients to pay upfront for a covered service. A copay might be lower for a primary doctor appointment and higher for a prescription, an imaging exam or a lab test. Copays are also common for emergency room visits. Health insurance providers require the copay at the time of the covered appointment or service.