What do you call the amount that the patient must pay at the time of each office visit?

Copayments, or copays, are a common form of cost sharing under many health insurance plans. Cost sharing is simply the portion of costs covered by you out of pocket. Splitting the cost of medical services between the insurance company and the policyholder keeps your monthly medical bills in check. 

If you’re enrolled in coverage through a small business plan or group health insurance, your employer is typically not responsible for copayments. Copayments are usually the responsibility of the policyholder.

Understanding how this system works helps you make smart insurance choices that suit both your health care needs and budget. Here’s what you need to know when it comes to health insurance copays and other out-of-pocket costs.

A health insurance copayment is a fixed amount set by an insurance plan for sharing the cost of covered services between the plan and the customer. The cost-sharing system is a critical selling point for each plan because it breaks down how much you’ll actually owe for services, prescriptions, doctor visits, and more.

It’s important to understand the cost-sharing details of any health insurance plan you’re considering, especially for frequently used services or prescriptions. Keep in mind that these are out-of-pocket costs you’ll pay in addition to monthly premiums and costs for non-covered services.

Cost sharing primarily comes in three forms:

• Copayment: This is a fixed, flat fee for certain kinds of office visits, prescription drugs, or other services. Because the health insurance copay is fixed, you’ll know ahead of time exactly how much you owe. If your policy lists a copayment of $25 for a doctor visit, you pay that amount each time you see the doctor.

• Coinsurance: This is a percentage of the total cost for a covered medical service, instead of a fixed copayment. If the insurance company owes a doctor $100 for your visit, and you have a coinsurance of 25 percent, you’ll pay $25 for the visit. You may pay it at the time of service or get a bill for your portion after the visit.

• Annual deductible: An annual deductible is a set amount that you may be required to pay toward covered medical care within a single year. For example, if you have a $3,000 annual deductible, you may need to pay that amount out of pocket toward covered medical care before the insurance company will begin paying your claims.

Generally, you’ll pay completely out of pocket for covered medical services until you reach your plan’s yearly deductible. After that, your insurance starts to pay for its share of costs, and you may owe a copayment or coinsurance for certain services as your “share.”

It’s also important to note that certain preventive medical services may not have cost sharing. For example, annual preventive care checkups, certain screenings, and childhood vaccines are generally not subject to copays, coinsurance, or deductibles. This means they’re generally covered without out-of-pocket costs.

Which services have a health insurance copayment?

The rules for health insurance copayments vary based on the policy and provider. Check the details of your plan’s policy for more information. You may owe a copayment for:

• Office visits with a primary care physician for non-preventive care
• Office visits with a specialist
• Prescriptions
• Physical therapy
• Occupational therapy
• Speech therapy
• Mental health in-office services such as physiotherapy or drug counseling
• Ambulance or ER services

As mentioned above, preventive care is generally exempt from cost-sharing thanks to the Affordable Care Act, so copays would generally not apply for these office visits.

Keep in mind that your plan may have provider network rules. Your costs may be higher if you go out of network or use a non-preferred doctor or provider. If you go out of network, your copayment or coinsurance costs may be more, or you may be required to pay the full amount for the services.

Is your copayment the same for every service?

The set amount you have to pay for a doctor visit, hospital visit, urgent care visit, or even prescription medication will likely be different.

Your copayment may differ based on the type of medical facility you visit—for example, a regular medical center visit versus urgent care. The same applies to emergency room visits and specialty care. Usually, standard medical care visits have the lowest copayments.

Copayment costs are usually more for HMO insurance plans, but these plans might cost less month to month. Usually, the higher the copayment cost, the lower the month-to-month cost. They might also be a difference if you have coinsurance in place of or in addition to your insurance copay.

Copayments for name brand vs. generic prescriptions 

You might also have a copayment for certain medications. However, generic drugs often have a smaller copayment than name brands. This means that you can take generic brands that work just as well, if not better than name-brand medications, while paying less for your copayment.

HMO vs. PPO copayments: What’s the difference?

PPO insurance plans, also known as Preferred Provider Organization, are a bit different from Health Maintenance Organization, or HMO plans. For starters, PPO plans are oftentimes a bit more expensive than HMO plans.

PPO insurance plans might also require you to pay a deductible before using your copayment, while some HMO plans might not have a deductible at all.

In-network vs. out-of-network copayment

While you are free to visit any doctor of your choosing, it’s good to know the difference between in-network and out-of-network insurance copay. If you choose to visit a doctor within your network, meaning one that accepts your type of health insurance plan, then you will pay an in-network copayment, which is usually lower.

However, if you choose to visit a doctor that is outside of your network, you will need to pay the copayment set by the doctor and your insurance provider. These out-of-network copayment fees might be higher and may be determined on a case-by-case basis. Fortunately, the Affordable Care Act has set regulations so that medical care—including copayments—is more affordable.

How does the out-of-pocket maximum affect copayments?

Some health insurance plans have an “out-of-pocket maximum,” which is a cap on the amount you’ll pay for covered services each year. Health insurance copayments and other forms of cost sharing count towards this amount and are capped by the out-of-pocket maximum listed for the policy.

For example, if your plan has a $6,500 dollar out-of-pocket maximum, once your contributions reach that amount, you stop paying any cost sharing amounts. From that point, your plan should cover all costs for the rest of the year for covered services.

What is the average cost of a copayment? 

A recent KFF survey found that the average cost of a copayment for a regular doctor’s visit is around $25, while a copayment for a specialty visit is around $42. This will depend on the type of care you need, the doctor you visit, and the insurance plan you have.

When do you pay your copayment?

Most doctor’s offices will require that you pay your copayment before entering the doctor’s office. When you come in on the day of your appointment, they will ask you to pay through debit, credit, or cash before being seen. If paying for medication, you will typically pay at the register of your pharmacy.

Does an HSA cover your copayment?

While you can use your health savings account (HSA) money to cover medical expenses, such as copayments, keep in mind that most times, you will only have access to an HSA if you have a high deductible health plan, or HDHP.

Which plans require a health insurance copay?

Copayments are more common with managed care plans, such as HMOs. Insurance companies offering these plans have contracts with health-care providers that let them pay fixed fees for essential services. This makes it easier to predict overall costs and to offer a cost sharing structure to consumers. It’s also possible, however, to find other plans (such as PPOs) that incorporate copayments into their cost-sharing structure, in addition to annual deductibles or coinsurance.

Plans with cost sharing offer benefits for both insurance companies and members. The structure lets insurance companies keep costs down and helps the insured know upfront what they’ll owe for each service.

Find a healthcare plan that fits your budget

According to the Kaiser Family Foundation, about half of U.S. adults say they have difficulty affording healthcare costs. That doesn’t have to be you.  It’s to your advantage to shop around and compare cost sharing details for plans you’re considering.

If you need help finding a healthcare plan that fits your budget, has lower copayment options, and fits with your health needs, use our search tool. As a licensed insurance broker, eHealth offers a wide selection of health insurance plans from trusted companies. If you’d like more information on cost sharing, or if you’d like help finding a health plan that fits your health needs and budget, our support staff is here to assist you.

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