What Does Copay Mean in Health Insurance?
 Written & Edited by Dan Marticio Dan MarticioDan Marticio is the content manager at SmartFinancial and has written 150+ articles across multiple insurance verticals.... Read more |
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A health insurance copayment, or copay, is a flat fee paid each time you visit the doctor, pick up a prescription or receive some other type of healthcare service. The copay amount can vary based on the service and your healthcare plan and in some cases, no copay will apply at all.
Learn how copays work and how they are different from coinsurance and deductibles.
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Key Takeaways:
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How Do Copayments Work?
Copays are one of the costs that a policyholder must pay out of pocket when receiving a health care. If you’ve ever visited the doctor and were charged a fee when checking in with the receptionist, you were likely paying your copay. Unlike coinsurance, which is percentage-based, copays are flat fees.
Copays will vary based on the type of medical service you receive and your health insurance plan. For example, a $25 copay may apply for an urgent care visit and a $10 copay for a generic drug prescription.
Common health care services that may require a copay include:
- Doctor visits
- Urgent care visits
- Emergency room visits
- Prescriptions
- Laboratory tests
- Hospital stays
- Family practice
- General practice
- Specialist treatment (e.g., internal, gynecology, occupational therapy, speech therapy)
Is Copay Paid Out Of Pocket?
A copay is paid out of pocket, meaning your insurance company will not cover it for you when you receive a health care service. That said, copays are subject to out-of-pocket annual limits — the maximum you can pay in out-of-pocket expenses each year. Once you hit your maximum, your health insurance carrier pays for 100% of the medical costs. Copays, deductibles and coinsurance all count toward your annual limit.
For example, say you have a $8,000 annual out-of-pocket maximum. Over the plan year, you visit the doctor, undergo various medical examinations and receive treatment. Eventually, your deductible, copays and coinsurance total $8,000. Any subsequent out-of-pocket costs for covered services within your plan year are covered 100% by your insurance carrier.
What Is a Typical Copay?
Copays can differ based on the the service you’re receiving, with the average copay in employer-sponsored health plans being $26 for primary care, $44 for specialist services, $404 for hospital care and $217 for emergency room visits.[1] Below is an example of copays by service for a Silver plan purchased from Cigna.[2]
|
Service |
Copay |
|---|---|
|
Health provider office or clinic |
$15 |
|
Prescription drugs |
|
|
Urgent care |
$25 |
|
Outpatient Services for mental health, behavioral health or substance abuse services |
$15 |
In addition, your copay amount can vary based on which category your policy falls under: bronze, silver, gold or platinum. For bronze plans, your copay and out of pocket costs are highest in exchange for paying the lowest monthly premium and for platinum plans, your out-of-pocket costs are lowest but your monthly premium the highest.[3]
What Happens If I Can’t Pay a Copayment?
Some facilities may refuse service if you cannot make your copayment and may reschedule your appointment to a date when can pay it.[4] The exception is for emergency services — a hospital must provide emergency medical care to anybody who needs it even if the patient cannot afford their copayment or is uninsured.[5]
If you’re a veteran with VA health care, it may be possible to set up a repayment plan to pay your copay bills over time or request a copay exemption if you’re experiencing financial hardship.[6]
When Aren’t Copayments Required?
Marketplace plans do not require you to pay a copayment for certain preventive services you receive within your plan’s network, even if you have not met your annual deductible. These services include:[7][8][9]
- Alcohol misuse screening and counseling
- Cholesterol screening
- Depression screening
- Type 2 diabetes screening
- Diet counseling
- Breastfeeding support
- Birth control
- Autism screening for children
- Immunizations for children
- Vision screening for children
- Hearing screening for newborns
Click here for a comprehensive list of preventive services that do not require you to pay a copay.
Why Would I Still Need To Pay After a Copayment?
If you still owe a balance after making a copayment, it is likely that you have not met your deductible yet. Remember: your health insurance deductible is the amount you must pay over the policy year before your insurance company starts contributing toward your medical expenses.
Keep in mind that copays generally do not count toward your annual deductible.[10]
Can Copayments Be Refunded?
Copays may be refundable on a case-by-case basis or when new legislation requires it. For example, the American Rescue Plan (ARP), passed in March 2021, canceled copays charged to veterans for medical care and pharmacy services from April 6, 2020 to September 30, 2021. Veterans can claim refunds for copays paid during this period.[11]
In addition, if a facility collects a copay in excess of what you should have owed, then the difference should be refunded.[12]
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Dan Marticio is the content manager at SmartFinancial and has written 150+ articles across multiple insurance verticals. His past experience writing in small business and personal finance verticals has earned him bylines on prominent fintech brands, including LendingTree, ValuePenguin, Fundera, The Balance and NerdWallet. His guides always aim to assist everyday consumers and entrepreneurs make informed decisions about their finances and business.
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