How does copay work for health insurance

For example, there may be one copay for lab testing and another for seeing a specialist. Or, you may pay one copay to see a doctor and a higher copay to go to the emergency room. Kelly Fristoe, president-elect of the National Association of Health Underwriters, says certain copays -- such as those for emergency room visits -- tend to be higher than copays for standard office visits to your primary physician.

Health insurance companies charge higher copay to discourage people from using emergency rooms when cheaper care, such as at an urgent care center or a primary physician's clinic, would suffice. Those plans often waive the emergency room visit copay if you wind up getting admitted to the hospital. He says insurers "want to discourage people from looking at that emergency room as being a place to go for things that maybe aren't an emergency.

Many health insurance plans have copayments. Copayments most often pop up in managed care plans, such as HMOs. Insurers that offer these plans negotiate fixed fees for essential health care services with health care providers. Fristoe says many people have gotten used to paying a copay.

This is especially true for people who rarely use health care services. Coinsurance is the amount you pay for health care services after you meet your deductible. By contrast, a copay is a fixed amount that you owe for a covered health service -- regardless of deductible. A copay you pay at the time of the health care service; coinsurance is paid after the provider files the claim with the health insurer.

A deductible is the out of pocket costs for health care you pay before your insurance kicks in and starts to cover your costs. You may pay copays toward your deductible depending on the plan. As a general rule, the higher your annual deductible, the lower the insured person's premium, and vice-versa.

Fristoe says that at one time, most consumers looked at the deductible as the most important feature of their health insurance plan. Apart from the main reason, which is to save its expenses during claims, there are a lot of reasons due to which insurance companies have copay clauses.

To discourage people from unnecessarily going to expensive healthcare centers for their treatments. With copay, the insured will be mindful of their spendings as even they will have to bear a portion of the medical expenses that will occur from these treatments. Copay insurance dissuades insured from misusing their insurance policy. To prevent fraudulent behavior amongst the insured. What are the disadvantages of copay? While a lot of companies opt for the copay clause, there are a lot of insurance companies who choose to not add a copay clause in the insurance policy because of various reasons.

Instances, where the insured has to pay a high copayment amount, may dissuade the insured from seeking proper healthcare attention when they need it, which defeats the entire purpose of buying an insurance policy. People who are well versed with medical insurance products and policies will choose not to buy an insurance policy with the copayment clause as they understand that its disadvantages overpower its advantages.

FAQs : Why do people opt for copay health insurance? People opt for copay health insurance as they have to pay less premium which makes them cheaper than other insurance policies.

Is copayment levied on cashless payment options? In most cases, copayment clauses are levied only on reimbursement options. Are the policies with copay clauses cheaper than the rest? Yes, policies with copay clauses are cheaper than the other claim settlement options as the liability divides between the policyholder and the insurance company. This proves to be beneficial for both parties. Conclusion Safe to say, now you must have gained some clarity about what copay meaning is! You can now make an informed decision while purchasing a health insurance policy and choose to opt for a copay option knowing all the pros and cons of the concept.

For example, your plan pays 70 percent. The 30 percent you pay is your coinsurance. A copay is a fixed amount you pay for a health care service, usually when you receive the service.

The amount can vary by the type of service. How it works: Your plan determines what your copay is for different types of services, and when you have one. You may also have a copay after you pay your deductible, and when you owe coinsurance. Your Blue Cross ID card may list copays for some visits.