What Is the Purpose of a Copay and How Does It Work?

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Navigating the world of medical copays or copayments can be challenging. Most people don’t really understand why they are paying them or why their insurance company asks for them. Unfortunately, if your insurance requires it, there is usually no way around these payments. Therefore, you might as well try to understand more about them. They can be known as fixed amounts you pay out-of-pocket after a doctor’s visit or receiving a prescription drug, and they are typically paid at the moment of service.

A copay is nothing more than a shared cost between you and your insurance company. These usually involve a flat fee of around $35 dollars or less, and help keep your monthly payments in check.

Copayments can vary depending on the kind of doctor you are seeing or the kind of medicine you need. The amount will change depending on whether you are seeing a primary doctor or a specialist. Contrary to what you may have thought, copays don’t actually have anything to do with your doctor; they are charged by your insurance company and only the individual insurance company can set the rate. Therefore, it is not possible to try to negotiate your copayment with your doctor as the amount is out of their hands.

How Do Copays Work?

As briefly mentioned above, whenever a copay is required, you will be splitting the cost between you and the insurance company. As you may know, having health insurance coverage can help you avoid high healthcare fees, as well as potentially receive more affordable care. This coverage and access to more affordable care is made possible by the insurance companies’ agreements with doctors in the network as well as a large pool of other paying members.

For example, an office visit that would usually cost $125 dollars without insurance may only cost $85 dollars with insurance thanks to the insurance company’s partnership with your doctor. But offering you a lower cost is not your medical insurance’s only job. Because of your monthly payments, your insurance also needs to cover part of your doctor’s visit. This is where the sharing of costs comes into play. All that is now left for you to pay is a flat fee of typically around $35 dollars every time you need to see your doctor. Your doctor then proceeds to submit a claim to your insurance company who will go ahead and pay the agreed amount after your copayment is taken care of.

It is important to recognize that copays do not change. Even if you decide to change doctors and look for one that charges less, your copay will usually remain the same as long as you stay under a particular health insurance plan. This also applies if your new doctor charges more than your previous one, your copay will still remain the same under the same insurance plan.

Now, you could sometimes be charged a deductible if your doctor asks for additional services such as bloodwork or a specific exam that was not established under the insurance agreement. This is why you would want to clarify all of these possible scenarios with your insurance company first, and ask for more information in regards to the potential financial responsibilities you may be held accountable for under a particular plan.

Copays Vs Deductibles

Copayments are a fixed amount you pay out-of-pocket after every doctor visit as you split the agreed cost with your insurance company. Deductibles, on the other hand are paid every year. These are an upfront or out-of-pocket amount policyholders pay before the insurance plan begins to pay. These typically cost in the range between  $1,000- $2,000. Your insurance company will not cover anything until your deductible has been paid in full.

One thing to remember is that copays can still be applied even if you have paid your deductible in full.

Do All Insurance Companies Charge the Same Copay?

The short answer is no. Amounts for copays will vary across insurance plans; insurance plans with higher monthly premiums will have relatively lower copays than those of lower monthly premiums.

Keep in mind, however, that not all insurance companies require a copay, and you will need to review different insurance companies’ plans to understand their particular coverage and the costs associated with the different coverage they provide. Therefore, it is always to the best of your advantage to shop around and compare cost-sharing details across different healthcare plans.

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