Copay

Copay or copayment is a fixed amount for a covered service, paid by a patient to the provider of service before receiving the service. It is one of the ways that health insurance companies use to share costs with policyholders.

Definition

A copay is a fixed out-of-pocket amount paid by an insured for covered services. It is a standard part of many health insurance plans. Insurance providers often use copayments to share health care costs to prevent moral hazard.

Types of Copayments

There are different types of copayments including, but not limited to:

• Primary Care Physician (PCP) Copay - This is a fixed amount that you pay for a regular check-up with your primary doctor.
• Specialist Copay - This is the amount you pay when you visit a specialist doctor like a cardiologist or an allergist.
• Emergency Room (ER) Copay - This is typically the highest copay that you will have to pay, and it is due at the time of service at an emergency room.
• Prescription Copay - This is the amount you pay for prescription drugs.

Factors Affecting Copay Amounts

The amount of copay can vary depending on several factors:

• Insurance Plan - Different insurance plans have different copay structures. Some may have a flat copay amount for all services, while others may vary the copay based on the type of service.
• Type of Service - The type of service can also affect the copay amount. For example, specialist services often have a higher copay than primary care services.
• Geographical Location - The cost of living in a particular area can also affect the copay amount.

Impact on Health Care Costs

Copayments are used as a way to share healthcare costs between the insurance company and the insured. The theory is that people will use less unnecessary health care if they have to pay a portion of the cost. However, there is ongoing debate about whether this is an effective way to reduce overall healthcare costs.

See Also

• Health Insurance
• Deductible
• Coinsurance

References

Copay Resources
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