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Copay vs. Deductible: Understanding The Difference

A copayment, often shortened to “copay,” is a flat amount paid out-of-pocket by patients for covered healthcare services. This is different from a deductible, which is a set amount that patients pay out of pocket before their insurance begins sharing the costs of covered services.

The biggest difference between copays vs. deductibles is that deductibles have a fixed limit, while copays apply to all covered medical services. Once your deductible is reached for the year, you do not pay it again until the following year. Meanwhile, copayments are required after every covered service regardless of your deductible’s status.

Keep reading to learn more about copays, deductibles, and how they apply to healthcare services coverage. 

Copays vs. Deductibles Comparison Chart

Type of cost
Fixed per-service fee
Fixed annual amount
Average cost 
$10 to $50 per service
$500 to $3,000 per year
Count towards out-of-pocket maximum?
Additional note
Copays do not count towards annual deductible
Specialty high-deductible health plans feature significantly higher deductibles in exchange for lower monthly premiums

Understanding Copays

A copayment is a fixed amount paid for healthcare services, including for prescription medications. You pay this every time you seek medical care or pick up a prescription. 

What Does a Copay Pay For?

A copay pays for part of a covered healthcare service. This flat fee is set by your insurance company each year and can change from year to year. Copays may also differ based on the healthcare service.

For example, a routine doctor visit to your general practitioner might have a $20 copay, while a specialist doctor visit to a cardiologist might have a $50 copay.

When Do You Pay a Copay?

Copays are required for many covered healthcare services. Common situations that require copays include:

  • Doctor office visits
  • Specialist appointments
  • Hospital stays
  • Emergency room visits
  • Prescription medication

There may be situations where copayments are not required. For example, plans may not charge a copay for screening services such as blood pressure, depression, and lung cancer screenings; or basic immunizations, like getting your annual flu vaccine

In addition, copays count towards your out-of-pocket maximum. In 2024, this amount for individuals is $9,450 at most, though some plans may feature a lower limit. Once patients have reached this amount for the year — which includes deductibles, copayments, and coinsurance spending — health plans pay in full for any covered services.

How Much Does a Copay Cost?

The average cost of a copay depends on the type of healthcare service as well as your individual plan. General benchmarks for copayment costs include $30 to see a primary care physician, $10 for generic drugs, and $50 to see a specialist. Copayments are fixed rather than a percentage, which means they don’t scale based on the cost of the service. 

Insurance plan types can also impact the cost of copays. Generally, the higher the monthly premiums, the lower the copay costs. The reverse is also true: the lower the monthly premiums, the higher the copay costs.

See It In Action

To understand how copayments work, consider Annie, a patient suffering from recurring nausea. She visits her general practitioner and pays a $30 copayment at the time of her visit for the routine doctor visit.

Her doctor suspects a more serious cause for Annie’s symptoms, so refers Annie to a gastroenterologist. Annie visits the gastroenterologist and pays a $50 copayment at the time of her visit for the specialist doctor visit.

The gastroenterologist diagnoses Annie with severe heartburn and prescribes a prescription medication to help alleviate and control her symptoms. Upon picking up the medication, Annie pays a $10 copayment for the generic brand of her prescribed medication.

In all, Annie paid $90 in copays, which counts towards her annual out-of-pocket maximum.

Understanding Deductibles

Deductibles are a fixed amount that patients pay yearly before insurance plans start helping with cost sharing. Consider a patient with a $2,000 deductible. They pay out of pocket for the first $2,000 worth of healthcare they receive each year. Once the deductible amount has been paid, insurance will begin cost sharing through coinsurance.

What Does a Deductible Pay For?

A deductible pays for covered healthcare services up to its fixed amount each year. For example, if a patient has paid none of their deductible for the year and makes a doctor’s appointment, they’re responsible for the entire cost up to the deductible amount. 

When Do You Pay a Deductible?

Deductibles are paid for most healthcare services. Much like copayments, however, patients may be able to access preventative healthcare services without paying their deductible. In general, patients pay deductibles for:

  • Regular doctor’s visits
  • Emergency room care
  • Hospital stays
  • Prescription drugs, though some plans may have a separate deductible for these

Deductibles count toward the yearly out-of-pocket maximum, but since deductibles are paid before copayments or coinsurance apply, it is unlikely that patients will reach the out-of-pocket maximum before paying their deductible in full.

How Much Does a Deductible Cost?

The cost of a deductible varies based on the type of insurance plan purchased as well as the individual plan itself. At the low end, deductibles could be $500 and $2,000 to $3,000 at the higher end of a standard health plan.

However, high-deductible health plans (HDHPs) are a specialty type of plan that feature significantly higher deductibles in exchange for lower monthly premiums. In 2024, HDHP deductibles can be as high as $8,050 for individual coverage. Because patients must pay a large deductible before their insurance begins cost sharing, HDHPs are best suited for those in good health and unlikely to need costly medical care.

Generally, plans with lower monthly premiums have higher deductibles and plans with higher monthly premiums have lower deductibles.

See It In Action

To understand how deductibles work, consider Annie again, the patient with severe heartburn. Her health insurance plan has a $1,000 deductible.

If she had not met her deductible yet, her first visit to her general practitioner would be billed to Annie in full for $300. Her next specialist appointment to the gastroenterologist would bill Annie $500 for the visit, followed by $400 in lab work during that specialist visit.

This is a total of $1,200 in medical costs. However, Annie only pays up to $1,000 to meet her deductible. After that, her insurance begins cost sharing for the remaining $200. In addition, her insurance will also immediately begin sharing the costs of any other followup appointments and covered services now that the deductible has been met for the year, lowering Annie’s subsequent medical costs.

When Do You Pay Both a Copay and Deductible?

In general, if you have not reached your deductible limit, copayments do not apply. If you have paid your deductible, copays will begin for your next healthcare services.

You may pay both a copay and a deductible if reaching your deductible limit covers only part of a healthcare service. For example, if you have $500 left to pay on your deductible, but a specialist appointment costs $800, there is still a balance of $300.

Once you pay $500 in out-of-pocket costs, you have met your deductible. Your insurance can now begin sharing the costs. However, because your insurance is helping to pay for the remaining $300, you may also have a copay.

What Is The Correlation Between Out-of-Pocket Costs and Premiums?

Premiums are a set amount that policyholders pay each month for their insurance. How much they pay depends on several factors, including their age, tobacco usage, and overall risk, along with the type of insurance purchased. To keep the insurance policy active, you must pay your premium every month.

Out-of-pocket costs include deductibles, copayments, coinsurance, and any other payments for covered healthcare services. Once you reach the out-of-pocket maximum, your insurance pays the full amount for all covered healthcare services for the rest of the year. 

Putting It All Together

Deductibles and copayments are common parts of health insurance policies. While both involve out-of-pocket payments, there is also a distinct difference between copay and deductible costs. 

Deductibles are a set amount that patients pay each year before insurance begins covering healthcare services. Once this amount is reached, it does not apply again until the following year. Copays are fixed amounts paid for service and apply to any healthcare services once a patient has paid their deductible. 

Understanding the difference between these two healthcare costs can help patients better predict possible health expenses and make policy changes as necessary to find a balance between premium payments and out-of-pocket costs. 

Frequently Asked Questions

One common misconception about deductibles is that they apply to all health services. Depending on the insurance plan, however, deductibles may only apply to some services, such as prescription drug care, but not to others, such as appointments with your primary care provider. 

One misconception about copayments is that they operate like coinsurance. While both are costs paid out-of-pocket for healthcare services, copayments are fixed amounts per service, while coinsurance is a percentage.

No. Some plans do not include deductibles or copayments. In these cases, policyholders can expect to pay higher premiums. These premiums help offset the cost to insurance companies when patients use healthcare services. 

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