How do health insurance copays work?
A co-pay is a flat payment that is the responsibility of the patient that is assessed to an event; such as a doctor visit or a prescription purchase. Similare to a copay...co-insurance is typically a calendar year responsibility of the patient; such as 20% or 30% that is paid by the patient after meeting a deductible (if applicable). There is usually a maximum out-of-pocket limit, such as $1,000, $2,000 or higher that is the most a member can pay prior to the plan paying 100% during a calendar or benefit year. Copays do not always count toward the out-of-pocket limit.
Example of how a co-pay event might work....
Patient visits doctor for cold. Patient pays $20 co-pay at time of visit. Doctor bills insurance $100 for "sticker price" of the visit and $20 for labwork. Because the doctor is a contracted "in-network" provider, the insurance carrier only allows $65 to be charged for the office visit. Since $20 has already been paid by the patient, they send a payment to the doctor of $45. The insurance carrier determines that the $30 is subject to coinsurance and pays 80% and determines that the patient is responsible for the other 20% - or $4. The patient would ultimately receive a bill from the doctor for $4.
What is an Insurance Deductible?
This is an amount that is required to be paid by a subscriber before health plan benefits will begin to reimburse for services. It is usually an annual amount of all health care costs that is not covered by your insurance plan.
Some plans have both individual and family maximum deductibles.
For example, with a $100. deductible, you would be responsible for the first $100. in health care charges for the year. After that, the coverage would be split according to your plan formula which may cover a percentage of the fee charged, or limit your costs to a specific out of pocket cost.