What is a Copay?

A copay in health insurance is a dollar amount you pay toward a doctor’s visit, prescription, or other service. Your insurance provider sets the copay amount you’ll generally pay at the clinic or office. Insurance companies discourage the unnecessary use of expensive healthcare resources by requiring a higher copay for certain services.

Most insurance plans require copays, which can vary based on several factors, including: 

• Service type: What kind of service you’re getting  
• Provider type: For example, you might pay a copay to see a physician or nurse practitioner but not another provider.  

Generally, you’ll know your copay before going to the doctor’s office, which can help you plan your healthcare budget. While copays vary by plan and insurer; generally, healthcare plans with higher premiums will have lower copays, while plans with lower premiums may have higher copays. 

What is Cost Sharing? 

Cost sharing is the proportion of costs you share with an insurer for a medical service. Cost sharing includes the deductible you must meet before insurance starts to pay, coinsurance, and copays. They are defined by the following factors:

• Deductible: The initial amount a policyholder must pay out of pocket before the insurance coverage begins.
• Copayment (Copay): A fixed fee the policyholder pays for specific medical services or prescriptions.
• Coinsurance: A percentage of the medical costs shared between the policyholder and the insurance company after the deductible is met.

Some plans require both coinsurance and copays for services. For example, suppose you have a $40 copay plus a 10% coinsurance requirement for a doctor’s visit. This means you’ll pay $40 on the day of the visit, then pay 10% of the doctor’s bill later.    

How Do Copays Work?

Many insurance companies include copays, but copays are more common in some than others. If you have a plan with copays, most services will require one. 

Which Health Insurance Plans Have Copays?

In reality, most healthcare plans include cost sharing and, specifically, copays as part of their out-of-pocket costs. They are a standard feature of the following healthcare plans:

• ACA Plans: Obamacare plans tend to feature copay requirements for office visits and other services.
• Original Medicare and Medicare Advantage plans: For those 65 and older, these plans require copayments for specific procedures, prescriptions, and facilities. 
• VA Healthcare plans: If you’re a veteran, you’ll pay different amounts based on the service provided and any service-connected disability.
• Group insurance plans: Most employer-sponsored plans require a copay when visiting an in-network physician or specialist. Average employer-sponsored copayments are $25 for primary care and $42 for specialty care.
• Medicaid: This government/state health insurance plan for low-income Americans charges copays, although they tend to be very small. Copays depend on income and are capped by the federal government at low amounts. 

What Does a Copay Pay For? 

Most ACA plans require a copayment for primary care or specialist office visits for illnesses and injuries. But while some plans charge coinsurance only, others charge copays for the following or a combination of copay and coinsurance. Copays are usually utilized in the following services:

• Office visits for illnesses and injuries
• Generic and other medications
• Labwork (bloodwork) and X-rays
• Outpatient surgery
• Chiropractic care appointments 
• Emergency department and urgent care visits
• Inpatient hospital care
• Inpatient and outpatient mental health and substance abuse therapy
• Physical, occupational, and speech therapies 
• Orthopedic, spinal, and bariatric surgery

If you have dental insurance, that plan also likely charges a copay for some preventive care and restorative work, although some insurers charge coinsurance instead. 

How Are Copays Determined? 

Many copays are tiered. That is, there isn’t one flat rate for all services provided. Instead, office visits with a primary care doctor, nurse practitioner, or physician assistant often feature the lowest copay. For example, a visit at your doctor’s office for a sprained ankle. 

But if you go to urgent care for the same sprained ankle, you’ll likely pay more for your copay. You could also pay a higher copay if you need specialist services, such as an orthopedic surgeon’s office visit or an actual surgery to repair your ankle. You’ll likely pay the highest copays for emergency room treatment. 

In short, copays increase in cost along with the actual charges and cost of that care. A surgery’s costs are more expensive than a visit to your family doctor. 

How Copays Work For… 

Copays work differently based on the type of service or product you’re getting. Learn more before you’re surprised in the doctor’s office. 

Prescriptions 

Most plans charge copayments for prescriptions. However, the way these copayments work is extremely variable. In general, copayments are more common for generic drugs, and plans encourage enrollees to use lower-cost generic medications or pay more.  

Across all plan types, medications are usually separated into tiers, such as these example costs:

• Generic drugs: $10
• Preferred brand name drugs: $35
• Non-preferred brand name drugs: $60
• Specialized drugs: $60 or more

Prescription copays are influenced by whether you get the prescriptions by mail order, supply length (such as up to 90 days), and whether you need the prescription for maintenance (such as blood pressure or diabetes medicines used regularly).

Copays are likely higher in ACA Bronze plans than in Silver, Gold, or Platinum medication plans. Preferred brand-named drug copayments are twice as high for bronze and platinum plans ($63 versus $28). 

In and Out-of-Network Providers 

Some plans have different copays based on whether you work with an in- or out-of-network provider. In-network providers contract with your health insurance plan to keep prices low. However, some plans charge lower copays if you use specific in-network facilities, prioritized due to higher quality outcomes. 

An in-network provider copay can be lower than an out-of-network provider who does not contract with your plan. For example, you may pay a higher copay to see an out-of-network specialist. 

Some plans do not count your out-of-network copayments toward the in-network deductible you must meet before the health insurance covers expenses. The payments only count toward an out-of-network deductible. Other plans do count these copayments toward both deductibles. 

Emergency Services 

Emergency services typically feature hefty copays and coinsurance to discourage use. For example, you may need to cough up $150 to $300 for a copay and a 30% coinsurance on any amounts billed. 

Deductibles and emergency services work very differently based on the plan. You may need to pay a copay even if you’ve met your deductible. But with other insurers,  your emergency services copay may not apply to your deductible. In- and out-of-network variations can apply too. 

Some ACA plans do not apply the general medical deductible to inpatient hospital stays. Instead, the plans have a sizable copayment for each stay or each day up to a maximum stay length. You may find that some health insurance plans have a maximum copayment per stay or year, after which you don’t pay more. 

How Much Do Copays Cost? 

Here’s a broad overview of average costs. Depending on your state and plan, the cost for services or prescriptions may be much higher or lower.

Type of Copay	Cost
Prescriptions	$10-$60, depending on tier
Emergency Services	$150-$300 plus coinsurance
Urgent Care Services	$15-$50
PCP Visits	$0-$65
Specialist Visits	$25-$125
Highly specialized services (surgery, radiology)	$100 plus 20-40% coinsurance
Virtual care visits	$0-$25

In general, the more expensive the service, the more you pay in copays. Additionally, you might pay a coinsurance percentage on top of copays for more expensive services. These might include office visits with specialists, outpatient surgery, high-tech imaging, and routine eye exams. 

To get the $0 copay on virtual care visits, you may need to see someone the insurer contracts with for service, not your usual doctor. To get a free PCP visit, you may need to meet a high annual deductible first.

Do Copays Contribute to Out-of-Pocket Maximums?

Your OOP max typically includes the deductibles, copays, and coinsurance you paid during the plan year. So, any copays you’ve paid toward services, medications, or facilities will be added to the year’s other outlays. 

The out-of-pocket maximum is the maximum annual amount you’ll spend in a plan year and resets every year. After you hit your out-of-pocket maximum, you often will not pay for any further covered medical expenses for the remainder of the year. However, you may continue paying copays, depending on your plan.

Some plans have both in-network and out-of-network OOP maxes you must meet. In this case, your out-of-network copays may contribute only to your out-of-network OOP max, or they may go toward in- and out-of-network OOPs. 

Does All Health Insurance Have Copays? 

Many health insurance plans have copays of some sort. Even plans that do not charge a copay for services may charge one for medications. On the other hand, some health insurance plans do not charge copays at all, instead opting for coinsurance only. This is most common as part of PPO health insurance plans.

Other HMOs set a higher deductible, such as $7,000, which you must first meet. After you meet the deductible, you pay nothing else out of pocket, including copays. Sometimes, the plan may have a $0 copay for your primary care doctor, with copays only charged for specialist visits or ER trips. With ACA-compliant plans, you do not pay a copay or any other cost-sharing for preventive care.

Can You Pay Copays With An HSA?

Yes, you can pay copays with your HSA. A health savings account (HSA) is a special savings account you can use to pay various qualifying medical expenses for the year or roll over into future years. You can only get an HSA with a High Deductible Health Plan. 

You may receive a special debit card to pay the copay from your HSA in an office. Or you can pay the copay out of pocket, then get reimbursed from your HSA.  

You can also pay copays with a flexible spending account (FSA), a type of account for those with employer based healthcare plans. You can also use a special FSA debit card to pay your copays. 

Should You Get an Insurance Plan With Copays?

Copays are ideal for many healthcare consumers due to their simple, predictable, set amounts you’ll know upfront versus being hit with a bill later, as with coinsurance. Those who want an easy, straightforward healthcare plan without unanticipated costs may be best suited for copays.

Copay forward insurance plans may be particularly suitable for those with ongoing health needs that can be met in a primary care office. For example, young children’s parents often visit the pediatrician or someone with a chronic health condition requiring routine follow-up appointments. 

Copays can also be a good match for someone without many healthcare needs—if you think you’ll only go once or twice a year, a lower-premium plan with set pricing could be a fit. 

Advantages

• Predictable: Your insurance plan sets pricing every year. Before entering the doctor’s office, you’ll know how much you’ll pay and can bring the necessary funds. 
• Cost-effective: Insurers with copay plans tend to reward you for keeping your medical costs low by setting lower copays for primary care provider visits, routine care, and generic medications. If you don’t need a lot of expensive medical care, copays can help you keep costs down.
• Good for those with medical issues: If you have a chronic or ongoing condition or diagnosis requiring you to see many physicians or access other services and procedures, an insurance plan with fixed copayments can help you budget. 

Disadvantages 

• Must pay at the time of service: It’s unlikely that you can request to be billed or pay your copay later. Instead, you must pay your copay at the visit. If you don’t pay your copays, your insurance plan could charge fees or interest on any unpaid amounts.
• Can be confusing: If you have a plan that combines copays and coinsurance, billing and payments can quickly become confusing if you have many visits during the year. Remembering copayment amounts differ by the service provider can also be confusing. 
• Limited coverage: The lowest copay tiers are often for a limited network of providers and limited services. You’ll likely pay more out of pocket for out-of-network providers or expensive procedures. 

What Copays Mean For You 

Copays are an essential feature of healthcare coverage in the United States. Not all plans include copays, but most do in some fashion. You can use copay costs to compare plans when shopping for a new insurer, whether on the ACA Marketplace, with your employer, or with Medicare. 

Remember that your copayment costs can vary yearly, and your healthcare needs can shift. Networks providing lower copayment costs can also change, so ensure your doctor is in the lower-copay network. It’s always wise to shop annually to see if there’s a better plan for your healthcare needs and wallet.