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Copay vs. Deductible: What’s the Difference?

Copays and deductibles are both payments made to an insurance provider. They are features of insurance plans, but deductibles and copays differ regarding the amount and frequency of payment for the insured. 

What are Copays?

A copay, also known as a copayment, is a fixed amount an insured person must pay to a medical provider to receive services. 

Your copay applies even if you haven’t met your deductible yet. For example, if you have a $50 specialist copay, that’s what you’ll pay to see a specialist—whether or not you’ve met your deductible.

What are Deductibles?

Deductibles are fixed payment amounts that you must pay before the insurance to take effect. For example, if you have a $3,000 deductible, you have to pay $3,000 before your insurance starts covering costs.

It is important to note that specific plans can have two deductibles, one for prescription drugs and one for services. 

Deductibles may also vary for insurance plans that are specifically for families. With family insurance plans, there is usually a family deductible, as well as an individual deductible for each family member. 

Copay and Deductible Example

Say you have an individual plan (no dependents) with a $2,000 deductible, $50 specialist copays.

Your ankle has been hurting, so you go see an orthopedic specialist ($50 copay) to take a closer look. That specialist recommends an MRI to find out what’s going on. The MRI costs $1,500. You pay the entire amount since you haven’t met your deductible limit yet.

If it turns out, you have a broken ankle and need surgery to fix it. You will need to pay $500 (deducitle remain amount) for the insurance to kick in. 

Wrapping Up

Insurance plans that require higher monthly premium payments are generally lower in copayments and deductibles. When choosing an insurance plan, make sure to make the best financial choice for you based on copayments and deductibles.

Updated on March 29, 2020

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