Understanding copays
A copay (or copayment) is a fixed amount you pay for a covered health care service, usually at the time you receive the service. It’s common to have separate copay rates for different types of care. For example, the copay to see your primary care doctor may be different than what you’d pay to see a specialist, like a dermatologist. Sometimes, you might pay a copay for prescriptions.
How do copays work?
You might remember times when you went in for a doctor visit and maybe paid a $15 or $20 copay before or after your visit. Copay amounts can vary depending on the provider and service. With health plans that have copays (not all do), you’ll know exactly what you have to pay ahead of time – which can help with managing your health care costs. For most plans, your copay does not apply toward your deductible. Also, some services may be covered at no additional cost, or $0 cost share, such as annual wellness exams and certain other preventive care services.
What’s the difference between a copay vs. coinsurance
Copays are different from coinsurance, and the type of payment you have will depend on your health plan. A copay is a fixed rate while coinsurance is a percentage of the cost of service. This chart helps break down how these two types of payments work and how they’re different.
| Copay | Coinsurance | |
|---|---|---|
| What is the amount paid? | Flat dollar amount | Percentage of the cost, if you've met your deductible |
| When is it paid? | Typically paid at the time of service | Billed by the provider who you will pay directly |
| Does it count toward your deductible? | No, not in most plans | |
| Does it count toward your out-of-pocket max? | Yes | Yes |
Example of how copays work
Jake visits his primary care doctor to talk about a rash. His health insurance plan includes a $25 copay for visits. When Jake gets to the clinic, he checks in and pays the $25 copay at the front desk.
During his visit his doctor refers him to a dermatologist. According to Jake’s insurance, his $25 doesn’t cover visits to specialists, so he’ll have to pay an additional fee. This is where coinsurance and deductibles are involved.
If Jake hasn’t met his deductible, he’ll get a bill for his dermatology visit which will be applied to his deductible. However, if he’s already met his deductible, he’ll only have to pay coinsurance, which is a percentage of the cost. His health plan pays for the rest of the fee.
Frequently asked questions about copays
No, not all health plans have copays. Some plans have copays and coinsurance. Some services may be covered at a no out-of-pocket cost to you as part of your health plan benefits.
Generally, no. Copays don’t count toward your deductible, but may be counted toward your out-of-pocket maximum, depending on your health plan.
Typically, copays will be required at primary care and specialist visits, urgent care, prescription drug orders and more. Some plans may include copays for services like physical therapy and mental health counseling. Be sure to read through your health insurance plan carefully to fully understand which services will require a copay.
Generally, yes. You can use a health savings account (HSA) or flexible spending account (FSA) for copays.
Managing costs with copays
Knowing how copays work can help you add up your potential costs more accurately when you're planning for the year or when you're choosing your health plan during open enrollment.
Comparing your potential medical costs to different types of plans might be helpful in making sure you are covered for different scenarios. Some plans, like fixed benefit health insurance, can help you manage potential out-of-pocket costs from your main health insurance plan.