Health Insurance 101 is a short series of monthly articles that explains the pieces of your health insurance. The goal is to help you better understand how your insurance works, and what kind of coverage you are paying for. To get the most out of these sessions, it’s advised that you have a copy of your benefits sheet with you.
Session #1 – Copay
Welcome to our new series!
We’re going to start with the very basic parts of your policy to begin with. When you look at your coverage you may see something that talks about copay. It can range from $15, $25, $35, to other various levels of copay. You will pay this amount when you visit the doctor or receive treatment.
Usually you will see copay under your office visits unless it says differently. However, parts of your policy like urgent care, emergency room, and specialist visit can each have different copays. There are two important things to remember with copays:
1. Copay is What You Pay
The copay is not the whole entire cost of your visit. The copay is how much you pay and the other amount is covered by your insurance company. You may only pay $25 for your copay, but the actual cost of the office visit could be well over $100. If the doctor charges more for a visit than the insurance company covers, you may end up with an additional bill for the remaining amount if you visit a provider that is not in your insurance company’s network.
2. The Copay Might Not Cover Everything
The copay might not cover everything from your visit to the doctor. For a routine office visit, the copay can be all that you have to pay.
However, if you need lab work, x-rays, or anything extra done, this will usually not be covered by your copay. These procedures and checkups can cost extra, sometimes involving your deductible and in many instances coinsurance. Often, people get their coinsurance, deductible and copay mixed up. They are three different things. We will go more in-depth with coinsurance & deductibles in our next installment. However for a brief comparison:
Copay – On your benefits sheet if a benefit lists copay, the dollar amount ($15, $25, $25, etc.) is what you will pay for the service unless you need something extra.
For example, you go in for a yearly checkup. You pay your copay of $25, get your checkup without anything extra, and you’re done. Copay is generally nice and simple.
Deductible – If the benefit you are looking at (ambulance, surgery, etc.) says deductible then coinsurance, you will need to pay for the service in full until your deductible is met then you will start paying the percentage for your coinsurance.
For example, if your deductible is $500, you will need to pay for those services that require a deductible in full until you’ve met that $500. This is usually cumulative per year, so if you pay $100 for one procedure and then some time later you pay another $200, your total that year so far is $300. Once you’ve reached $500, the insurance will start paying out a percentage. Usually they pay 70% or 80% and you will pay the difference at 30% or 20%. Once you reach your annual out of pocket maximum (OOPM) which could say $2,000, $3,000 and up to $7,500 or $10,000 (not counting your deductible) which is what you will be responsible to pay out of your pocket for catastrophic care, then the insurance company will pay remaining balances for the year.
What You Can Do
What you can do so you can better understand your policy, is to find the benefits sheet that shows what is covered and how procedures are covered. Go through the list and see which of the items have copays and which don’t. That way, the next time you go visit the doctor you’ll know exactly what you should be paying and what you’re getting in the insurance policy you pay for.
(Disclaimer: Your insurance coverage may differ compared to some of the information provided in this series. The information provided is for general information on health insurance principles. Check your specific policy for information regarding your coverage. We are not liable based on general information that may differ on your policy. If you have any specific questions regarding your policy, please contact your carrier.)