What Is a Copayment in Health Insurance?

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.

Learn how copays work and how they are different from coinsurance and deductibles.

What Is a Copayment in Health Insurance?

A copay in health insurance is a flat fee paid each time you use a healthcare service, such as visiting the doctor, going to urgent care or picking up prescription drugs. For example, you may be charged a $25 copay each time you visit your primary care physician and $10 each time you pick up a drug prescription. Seeing a specialist, such as a chiropractor, occupational therapist or speech therapist, can incur a copay, too.

Get Personalized Health Insurance Quotes Here

How Does a Copay Work?

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.

The copay amount may increase or decrease based on your health plan. Choosing a policy with a lower monthly premium, for example, may result in higher copays each time you visit the doctor.

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)

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 (more on the differences for each in the next section).

For example, say you have a $4,000 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 $4,000. Any subsequent out-of-pocket costs for covered services within your plan year are covered 100% by your insurance carrier.

A copay is a flat fee paid each time you visit the doctor, go to urgent care or pick up prescription drugs.

Copays charged by an out-of-network provider may not count toward your annual limit. Be sure to confirm with your insurance provider and use in-network providers when possible.

Copay vs. Coinsurance vs. Deductible

Copays, coinsurance and deductibles are out-of-pocket costs charged when receiving medical services. Each of these expenses will count toward your annual out-of-pocket maximum.

See our table below for differences between copays, coinsurance and deductibles.

	Copay	Coinsurance	Deductible
Description	Flat fee	Percentage of cost of medical service	Flat fee paid before your healthcare coverage covers your costs
Example	You pay a flat $20 copay to receive medical service. Does not count toward deductible.	The medical service costs $500 and your coinsurance is 20% ($100 fee).	The medical service costs $1,000, plus a $250 deductible and $20 copay. You pay the deductible and copay and your insurance carrier pays for the remaining $730.

Covered services will typically charge either a copay or coinsurance. Copays and coinsurance will not count toward your deductible — you may need to pay your copay or coinsurance plus your deductible before healthcare insurance covers the difference.

What Is a Typical Copay?

Copays can start as low as $10 and rise to $100 and up depending on the medical service and healthcare plan. Below is an example of copays by service for a Silver plan purchased from Cigna.

Service	Copay
Health provider office or clinic	$15
Prescription drugs	$10 for generic brands $25 preferred brands $200 non-preferred brands $250 specialty brands
Urgent care	$25
Outpatient Services for mental health, behavioral health or substance abuse services	$15

Do I Need to Pay a Copay?

You will need to pay a copay if you want to receive certain medical services. Copays are part of the cost-sharing function of health insurance. Medical services are more affordable because the insured (that’s you) and the insurance company share the cost. Copays, coinsurance and deductibles are all examples of how the insured shares the cost of the medical service.

Choosing a policy with a lower monthly premium may result in higher copays each time you visit the doctor.

However, some health insurance plans do not require a copay for certain medical services (see next section).

What Doesn’t Require a Copay?

Certain healthcare services may not require a copay depending on your health insurance company and your policy. For example, office visits or some prescription drugs may not incur a copay if you have a high-deductible health plan.

However, copays will apply in most cases and if not, you may be charged coinsurance instead. Ask your health insurance company what type of healthcare services will incur a copay or coinsurance.

Can a Copay 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.

Get Personalized Health Insurance Quotes Here

Key Takeaways A copay is a flat fee paid each time you use a healthcare service, such as visiting a doctor, picking up prescription drugs or receiving urgent care. Copays serve as one way policyholders share the cost of receiving healthcare services with their insurance company. Copays will count toward your health insurance policy’s annual out-of-pocket limit and you will not need to pay copays once you reach the annual cap.

Shop for health insurance, the easy way. SmartFinancial makes it simple to compare rates and benefits from health insurance companies within your area. Just enter your zip code below or call 855.214.2291 to receive your free health insurance quotes.