Copay in insurance is a fixed dollar amount you pay out-of-pocket each time you receive medical services from an in-network provider. Copay, also called “copayment,” varies by type of service provided, like doctor visits, lab tests, specialist visits, or prescription drugs.

What is copay in insurance?

In health insurance, a copay (or copayment) is a predetermined amount you must pay for each visit to a doctor or physician. Every time you pick up a prescription or go to the doctor, you have to pay a copay on the spot.

Health insurance companies have different copayment rates for particular services. A copay for an emergency room visit would be different from a copay for a doctor’s visit. Furthermore, prescriptions, urgent care, and other services, such as speech therapy and physical therapy, have different copays.

The copay in insurance also varies by the doctor you visit and the drug you take. For instance, the copay for a specialist physician is higher than the one for a primary care physician. In the same way, generic drugs are less expensive, so their copays are lower than those for brand-name drugs.

How does copay In Insurance work?

Like deductible and coinsurance, a copay is a cost-sharing provision in health insurance that allows policyholders to share their health care costs with the insurers.

With an in-network provider, your insurance company usually has a contract that states a specific fee you must pay when you receive health care service. Insurance companies determine the copay a policyholder must have to pay for a particular service. 

Depending on your health insurance plan, you might be asked to pay a copayment before or after you’ve met your deductible. Under some plans, you might have to pay a deductible first before your health insurance covers your medical expenses. 

Upon reaching your deductible, you will be responsible only for copayments and coinsurance. You will keep paying your coinsurance and copay in insurance until you’ve met your annual out-of-pocket maximum. After that, your health insurance plan will cover all your covered medical care.