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There are many factors you want to take into account when selecting your health insurance policy for 2019, including amount of coverage, monthly premiums, and deductibles (or a no deductible policy). But one often overlooked factor that will affect your total annual out of pocket health care expenses is the copayment (copay) arrangement of your plan.
Below, we will look at what copays are, why they exist, how they have changed over the years, and what to look for in your next health insurance plan as far as copays are concerned.
What Are Copays In Health Insurance?
A copay schedule is one element of an overall cost-sharing plan for a health insurance policy. It is part of your total out of pocket expenses, being a fixed amount you have to pay for specific services, regardless of their actual exact price tag. That's in direct contrast to coinsurance, which has you pay whatever percentage of a covered charge that your insurer does not pay (once you've reached your deductible, if you have one).
Many, though not all, policies will have at least some copays and vary the amount to be paid based on different categories like: doctor's office visit, seeing a specialist, using urgent care, or using ER services. You will also see copays for prescription drugs, medically necessary tests, and physical therapies.
Copays are discounted when you use in-network doctors on many policies, and on the other hand, copays may be quite large for major operations and very expensive services (if those categories aren't handled on a coinsurance only basis.) Copays tend to be a bit more complicated than coinsurance, and so, it's harder to determine their overall effect on total out of pocket expenses. That means you need to rely on a good insurance agent or manage to calculate your likely health care usage, copays, and coinsurance in relation to your premiums and deductible.
In the past, copays were the same regardless of provider in most cases; but today, they usually vary based on which doctor or hospital is used in relation to which insurer you have. Overall, this system saves everyone money, but it adds to complexity and makes choosing your best policy a little more complex.
Finally, realize that since copays can get rather large with emergency medical treatment and with ongoing treatment of certain chronic conditions, most policies have a cap on annual out of pocket expenses. That means all of your out of pocket expenses, including both for copays and coinsurance. Sometimes, if you keep your policy for long enough, a lifetime out of pocket cap will apply as well.
Variations In How Copays Are Handled
As we've seen, copays can become a significant out of pocket expense, although they are shrinking as a share of out of pocket costs year by year currently.
You can expect copay rates of $15 to $20 per doctor's visit, $30 to $50 for specialist visits, $75 to $100 for urgent care, and $200 to $300 for ER care. For prescription drugs, rates vary greatly based on whether it's a brand name or generic drug.
Note that some insurers credit copays against your deductible, while in others, copays aren't paid at all under after your deductible is met.
To discuss how copays and other factors might affect your choice of health insurance this year, contact Summerlin Benefits Consulting today!