Every individual and family health plan comes with out-of-pocket payments like copays, coinsurance, and deductibles that the insured is required to pay. A copay is a type of cost-sharing, which is usually a fixed amount paid by the insured when they receive covered care like an office visit or when they purchase prescription drugs. Whereas a deductible is an amount, which insured need to pay out-of-pocket toward their covered benefits before their health insurance carriers start paying. In the majority of cases, the copay amount of the insured will not go toward their deductible. A coinsurance is a set percentage that the insured pays for a covered healthcare service.
A Copay is a fixed amount set by a health plan for certain healthcare services. Since it is a cost-sharing measure between the insured and the insurance providers while paying for healthcare services, it is vital for the insured to consider these out-of-pocket costs when purchasing a health plan.
Individual Health Plans that have Copays
Copay is commonly associated with managed care plans like HMOs plans. Health insurance carriers offering HMO plans have a contract with healthcare providers under which they pay fixed fees for essential healthcare services. Thus, it makes easier to predict the overall costs of the plan and to provide a copay system to the insured. Besides HMO plans, many PPO plans along with some other health insurance plans also have copays into the cost-sharing structures along with deductibles or coinsurances.
Other Out-of-Pocket Expenses
People with an individual health insurance plan can expect to pay some other out-of-pocket expenses like annual deductibles and coinsurance in addition to copays. If the policyholders receive medical services from an out-of-network provider, then they will likely have less or no coverage. This means, that they either have to pay a higher copay or pay the full price for the received healthcare.
Difference between Copays and Coinsurance
Both copays and coinsurance are kinds of cost-sharing measures implemented by the health insurance carriers. While copays are a set amount, which the customers pay for covered medical services, coinsurances are a set percentage, which the insured pays for a covered service. For instance, if a copay for a doctor’s visit is $30, then the insured would pay a $30 every time the insured visits a doctor. Whereas, if a coinsurance for a doctor’s visit is 25% and if the doctor’s appointment cost insurance carrier $100, then the insured would need to pay 25% of $100 that is $25 at the time of their visit. Some health insurance plans have both a copay and a coinsurance.
Another out-of-pocket expense that comes with a health insurance plan is an annual deductible, which is a set amount the insured is required to pay toward their covered medical expenses within a single year before their insurance carrier starts paying for their medical care. For example, if a health plan has an annual deductible of $2,000, then the insured need to pay $2,000 out-of-pocket to meet their deductible before their insurance carrier pays for their care.
About Cost-sharing measures
The policyholders need to know that a copay, coinsurance, and deductibles sometimes apply toward the same medical service, though it is not always the case. Policyholders may likely require to pay coinsurance after they have reached their deductible. Insured should know that certain preventive medical services are not subjected to cost-sharing at all. Certain preventive services are covered with no out-of-pocket cost. Insured are likely to pay their copay and coinsurance they have after they reach their deductible and until they reach their out-of-pocket maximum.
There is a limit to the amount which insured have to pay out-of-pocket within a year for their healthcare expenses. For example, if an insured has a health plan with an out-of-pocket maximum of $5,000, then after reaching that amount, he/she will not require to pay out-of-pocket expenses for the covered healthcare for the rest of the year, including copays and coinsurances.