The Normal Person’s Guide to Copays

We’ll get back to Mary and Billy tomorrow – but first, let’s get the hang of these copay things!

Copays are probably the simplest of the payment options – a copay is a set amount of money that you pay for a given service. That’s it. Simple.

There are two possible ways that copays will appear in your plan, however. Evidently, there’s a law somewhere that insurance MUST be complicated by something.

The first is as a straight copay: your copay is the amount you pay no matter what is going on with your deductible. Your copay applies to your deductible – every cost you pay does – but that just means that the copay is added to the total paid toward meeting your deductible. What it means when you walk into the doctor’s office is that you pay the amount specified – each and every time*. That’s all you pay.

Mary has a $2500 deductible and a $25 copay for office visits. The first time Mary goes to her doctor, her deductible has not been met. But because Mary has a straight copay, she simply pays $25.

After several misadventures with her friend Billy, Mary has met her $2500 dollar deductible and needs to see her doctor again. When she sees the doctor this time, she pays $25. The deductible has no effect on what Mary pays for an office visit.

The second possibility is trickier: Mary’s copay now pays AFTER deductible.

When Mary goes to her doctor for the first time, she pays $75 – this is the allowable (amount that the doctor and insurance company agreed on) – and 100 % of what the doctor will be paid.

When, later that year, Mary’s deductible is met and she walks into the doctor’s office, she now only pays $25 – the copay after deductible.

And then, just to make it really confusing, there’s a hybrid:

A plan can have a limited number of copays before the deductible and then either copay or coinsurance after the deductible is met.

Let’s assume Mary has two copays before deductible:

In this case, Mary sees her doctor before her deductible is met and pays $25. She goes back and again pays $25.

But the third visit before her deductible is met, Mary pays $75 – and she will continue to pay the full allowable for every visit until her deductible is met.

Now, all the money Mary pays counts toward her deductible no matter which kind of copay she has. Even her straight copays count toward the deductible – it just doesn’t affect the services that have straight copays – it WILL affect those that are affected by the deductible.

That just means if Mary has a straight copay and ends up seeing her doctor 100 times, she will meet her deductible because each $25 payment to her doctor counts toward her deductible.

So, last example: Mary has a straight copay of $25 for doctor office visits but a 20 % coinsurance after deductible for rehabilitative therapy (which she needs after driving with Billy again). Mary has seen her doctor 10 times and been to the emergency room twice and had several trips to the drug store. Everything Mary paid to the ER, the drug store and her doctor counts toward her deductible. So she’s paid $250 to her doctor and we’ll assume another $750 to her drug store and finally $1500 to the hospital – Mary’s $2500 deductible has been met.

When Mary goes back to her doctor, her straight copay is still $25. Now, had she gone to rehab before her deductible was met, she would have had to pay the full cost – we’ll say her allowable for rehab is $1000. Mary would have paid $1000.

BUT since her deductible is met before she goes to rehab, she pays only the coinsurance – and 20 % of $1000 is $200. So, her copay remains the same but it does affect her deductible – just not the other way around!


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