Difference Between Copay and Deductible

Copay vs Deductible
 

Health insurance offers a patient coverage against the costs of medical expenses. However, health insurance policy in certain countries such as the United States does not cover 100% of the patient’s bill and requires the patient to make a contribution as well. There are a number of methods that insurance companies employ to share this cost.The following article takes a closer look at two such cost sharing methods; deductible and copay. Since health insurance terminology can be quite confusing due to its complexity, it is important to understand clearly what each term means as well as understand the similarities and differences among them.

What is Copay?

Copay is a fixed amount that a patient pays for every visit to a health care practitioner (such as a doctor or hospital) and for every prescription that is filled through a pharmacy. Copay allows the insurance company to share the medical bill with the patient thereby deterring the patient from making unnecessary doctor visits. The amount charged as copay depends on the type of doctor that a patient sees (a specialist requires a higher copay vs. a general practitioner), type of medicine purchased; generic less expensive drugs as opposed to branded more expensive ones, and whether the patient seeks medical care from a health care practitioner within the insurance company’s network. The main thing to remember about copay is that it is a fixed sum, and once paid, the insurance company covers the rest of the bill. This means that if your copay is $35, whether your total bill is $100 or $1000 the insurance company covers the rest.

What is Deductible?

Deductible is the amount that the patient should pay out of their own money per year before the insurance company starts sharing the medical bills cost with the patient. For example, the deductible on a certain medical insurance is $2000. The patient suffers an injury and the medical bill is $1500. This will have to be borne by the patient as the deductible has not yet been paid. Once the $1500 is paid $500 is the balance left on the annual deductible. The patient suffers another injury in a few months with a total medical bill of $1500. Now the patient will pay $500, and the rest $1000 will be paid by the insurance company, as once the $500 is paid the total deductible of $2000 is covered. However, it is important to keep in mind that even when the yearly deductible is paid in full the insurance company does not cover the total amount of the medical bill. The patient still has to share the cost of the bill through a coinsurance payment or copay until their out of pocket limit (the total that the patient has to pay out of their own pocket including coinsurance, copay and deductibles) are met.

What is the difference between Copay and Deductible?

Health insurance policies in certain countries require that the patient share in the medical cost. In this article, we looked at two such cost sharing mechanisms; deductible and copay. The main similarity between deductible and copay is that they are both fixed amounts and does not vary with the cost of medical procedures or services that a patient receives. Furthermore, laws such as the Affordable Care Act in the United States allows patients to go for preventative health checkups without making any coinsurance payments and covers the total medical bill even if they have not paid a cent on their deductible. The main difference between copay and deductible is that until the deductible is paid in full the insurance company does not contribute towards the medical bill. Furthermore, a deductible is paid only a few times a year until the total deductible is met, whereas copay is made every time a prescription is filled or when the patient visits a healthcare practitioner.

Summary:

Copay vs Deductible

• Health insurance offers a patient coverage against the costs of medical expenses. However, health insurance policy in certain countries such as the United States does not cover 100% of the patient’s bill and requires the patient to make a contribution as well.

• Copay is a fixed amount that a patient pays for every visit to a health care practitioner (such as a doctor or hospital) and for every prescription that is filled through a pharmacy.

• Deductible is the amount that the patient should pay out of their own money per year before the insurance company starts sharing the medical bills cost with the patient.

• The main similarity between copay and deductible is that they are both fixed amounts and does not vary with the cost of medical procedures or services that a patient receives.

• The main difference between copay and deductible is that the deductible is paid only a few times a year until the total deductible is met, whereas copay is made every time a prescription is filled or when the patient visits a healthcare practitioner.

 

Further Reading:

  1. Difference Between Deductible and Premium
  2. Difference Between Excess and Deductible 
  3. Difference Between Deductible and Out of Pocket Maximum