A copayment, or copay, is a fee you pay each time you visit a healthcare provider or have a prescription for medication filled at a pharmacy.
Copays are an out-of-pocket expense, meaning you have to pay for part of the cost of your healthcare or medication. Copays share the cost of your healthcare between you and your insurance company. After you pay the copay, your insurance company will pay your doctor or pharmacist the rest of the cost of your service or medication.
Your insurance plan usually determines a set amount you will pay (such as $20) for each service or medication you’re receiving. Different insurance plans have different copay levels. For instance, your doctor’s office might charge you a copay of $30, but the copayment for a visit to an emergency department will usually cost a lot more, say $200. There is usually also a maximum cost, or a total amount for the year, that you will pay for copays.
Your insurance plan will establish in-network copayments. In-network is when your healthcare provider has a contract with your health insurance plan to provide services in your area. Out-of-network copays will be different from in-network. Out-of-network is when your healthcare provider does not have a contract with your health insurance. In-network copayments are usually lower than out-of-network copays. That means it will usually cost you less to get healthcare in your network than outside it.
It is very important to understand all of your copay costs before you sign up for a health insurance plan. If you visit your doctor often, you might want to choose an insurance plan that has low copays. If you have lower copayments, however, your premium (the monthly amount you pay for health insurance) may be higher. You should always consider all of your anticipated healthcare costs, as well as plan for unanticipated healthcare costs, before choosing a health insurance plan.
June 15, 2015
Christopher Nystuen, MD, MBA