If you’ve ever reviewed an insurance plan before enrolling, you’ve likely come across a ton of confusing words like copays, deductibles, premiums, and coinsurance. These words are confusing for a reason: they help insurance companies obscure your actual cost of care and make it hard for you to fight back when you’re overcharged or under-cared for. 

In this series, we’ll break down the complex jargon that powers American healthcare to help you better understand your care, your bill, and your medical expenses.

Next-up: copays.

What does it mean when you have a copay?

A copay, co-pay, or copayment is a fixed amount of money you pay upfront for a service covered by your health insurance. Copays vary plan-to-plan and change depending on the service, the relationship between your insurance and the provider, and the type of provider you’re seeing. For example, on the same plan, you might see a $30 copay for an in-network doctor, a $45 for an out-of-network doctor, a $60 copay for a specialist, and a $10 copay for prescriptions.

Yep, it can get a little confusing. But bear with us while we break it down.

When do I pay a copay?

Copays are generally paid at the doctor or specialist’s office at the time you receive care. For example, if you have an infection and see the doctor, the amount you pay for the doctor’s appointment is your copay. Not sure what your copay is? It should be listed clearly on your insurance card.

Does that mean I should pay my copay every time I see a doctor?

No, not exactly. While most services require you to pay your copay, thanks to the Affordable Care Act (ACA), all preventive care appointments are free, including your annual check-up and any associated labs.

Copays also change depending on the doctor you’re seeing. For example, some insurance plans offer lower copays when visiting an in-network doctor, while others might have a higher copay for specialists. Your copay may also change depending on the prescription type, and some plans offer lower copays for generic medication instead of name-brand prescriptions.

What should you do when a provider insists that you pay your copay during a preventive care appointment?

Under ACA regulations, preventive care appointments like an annual check-up or well-woman’s exam - as well as any labs associated with your appointment - should be completely free. Unfortunately, some doctors and receptionists overlook this and end up asking patients to pay their copay anyway. You should not do this. If your doctor’s office insists that you pay a copay for a preventive care appointment, kindly explain to them that the visit should be free since it falls under the ACA guidelines, which mandate insurance plans offer free preventive care services at zero cost to the patient.

The request to pay your copay is often the result of a misunderstanding or mistake. We generally find it’s best to approach these situations by giving the doctor or receptionist the benefit of the doubt. If your provider still insists that you pay your copay for your annual check-up, ask if you can be billed but pay at a later time. If they refuse to see you and demand payment at time of service, you will need to file a claim with your insurance. 

Note that there are a few exceptions in which a plan does not cover preventive services - but this is exceedingly rare nowadays.  

Copay v. Coinsurance: what’s the difference?

The differences between coinsurance and copayments as per various parameters are listed below:

  • Applicability: When it comes to coinsurance, while the amount you have to pay might vary, the percentage payable remains fixed per the policy. On the other hand, copayment is fixed regardless of whether it is an amount or percentage of the treatment costs.
  • Payment process: With coinsurance, you must pay for the medical services received only after meeting your treatment/annual deductible. However, with copayments, you have to bear the cost-sharing payments each time you avail medical services.
  • Time of payment: With coinsurance, the amount you pay towards your medical expenses is billed by your policy provider, and you have to pay them directly. However, you must bear the costs when seeking medical service under copayment.
  • Effect on deductibles: Coinsurance is payable only after you have paid deductibles; however, copayments only go towards your deductibles under specific circumstances.

How do I get a lower copay?

While your copay may differ from doctor to doctor, your overall suite of rates is fixed and does not change unless you change your health plan. Generally speaking, plans with lower monthly premiums (the amount you or an employer pay each month to have your insurance) have higher copays. Conversely, plans with higher monthly premiums usually have lower copays. 

Copays can be confusing, but they’re an important part of your health plan. Understanding what they are and when you’re expected to pay them will help you better understand your plan and make the most of your benefits. With Peachy, we make it easy to understand and pay your medical bills while offering the ability to review and negotiate your bills through Peachy Pal.