What Is a Copay in Health Insurance?

Health insurance co-pays are the amounts you pay out of pocket at the time you receive care. Co-payment fees for lab tests, doctor visits and medical procedures are determined by your insurer. When you go to the doctor, you pay a small portion of the cost and your insurer pays the balance. The National Association of Insurance Commissioners advises you to consider co-pay costs and your ability to pay when deciding on a health plan.

Co-pay Costs

• Your insurer and your employer determine the amount of your co-pay for a particular service. You may pay $100 for an emergency room visit, $15 for a lab test or $5 to fill a prescription. You can find the specific dollar amount for each service in your plan's summary which describes the benefits, rules and definitions of your coverage. You pay your co-pay fees until you meet the specified coverage limit defined by your insurance plan.

Co-pay Variations

• Co-pay amounts can vary, even for the same benefit. For example, prescriptions for generic drugs generally require a lower co-pay than their name brand counterparts which often demand higher fees. The type of provider you see can increase co-pay costs as well. Co-pays for office visits to a specialist are usually higher than what you pay to see your regular doctor. Low-income and veteran insurance programs charge varying co-payment amounts for the same benefit because they are based on a sliding scale fee according to income.

Co-pay or Coinsurance

• Coinsurance is a type of co-pay, but rather than paying a specified dollar amount, you agree to pay a certain percentage of the covered costs after meeting your deductible (the money you pay out of pocket before your insurance pays). Many health insurance providers use a combination of co-pay and coinsurance. For example, your insurer may require you make a co-pay for doctor visits and pay coinsurance for hospital stays.

Co-pay Benefit

• Paying the per visit co-pay can help you meet your deductible. Suppose you have a $500 deductible. Keep track of your total co-pay costs, including prescriptions, doctor visits, and other benefits that require a co-payment. Once the total amount of your co-pays equals your deductible, your insurer is required to pay the full amount for any benefit cost for that year. File all your co-pay receipts to ensure you do not overpay for benefits once your deductible is met.

Fund Your Co-pays

• Create a savings plan to reimburse you for your co-pay costs by opening a flexible spending account through your employer or a Health Savings Account if you buy your own insurance. You can use pretax dollars from your flexible spending account and after-tax dollars from your Health Savings Account to fund your co-payment costs until you meet your deductible.