Copay Definition | OnlineHealthIns.com Glossary

Copay (Copayment)

Also known as: Copayment

A fixed dollar amount you pay for a specific covered service, like a doctor visit or prescription, regardless of the service's actual cost.

A copay (short for copayment) is a flat, predictable fee you pay at the time you receive a covered service. Unlike coinsurance, which is a percentage of the cost, a copay stays the same no matter what the provider actually charges.

Different services often have different copay amounts, such as $25 for a primary care visit versus $50 for a specialist.
Prescription drug copays are often tiered, with generic drugs cheaper than brand-name or specialty drugs.
Copays may or may not count toward your deductible, and usually do count toward your out-of-pocket maximum.

Copays are popular with plan designers because they're simple and predictable for members. They're commonly used for routine, frequent services like office visits and prescriptions, while bigger-ticket items like surgeries or hospital stays are more often handled through coinsurance after the deductible.

A common misconception is that paying a copay means a service was free otherwise. The copay is your share; the insurer separately pays the provider's negotiated rate for the rest, assuming the deductible has already been met or the service isn't subject to it.

Example

A member pays a $30 copay for a same-day urgent care visit, and that amount is the same whether the visit's full billed cost is $150 or $400.

Good to Know

Some plans apply copays only after the deductible is met, while others apply them from day one, so check your plan's specific rules.

Related Terms

Coinsurance — The percentage of a covered service's cost you pay after meeting your deductible, with your insurance plan paying the rest.

Deductible — The amount you must pay out of pocket for covered care each year before your health plan starts sharing costs through copays or coinsurance.

Out-of-Pocket Maximum — The most you'll have to pay in a plan year for covered services before your health insurance starts paying 100% of covered costs.