What are Co-Pays? What are Deductibles?

What Are Co-pays?

A co-pay –short for copayment– is the fixed amount a healthcare beneficiary pays for covered medical services. The remaining balance is covered by the patient's insurance company.

Co-pays usually vary for different services within the same plans, particularly when they involve services that are considered essential or routine and others that are considered to be less routine or in the domain of a specialist.

Co-pays for standard doctor visits are typically lower than those for specialists. Note that copays for emergency room visits tend to be the highest.

What Are Deductibles?

A deductible is the fixed amount a patient must pay each year before their health insurance benefits begin to cover the costs.

After meeting a deductible, beneficiaries typically pay coinsurance —a certain percentage of costs— for any services that are covered by the plan. They continue to pay the coinsurance until they meet their out-of-pocket maximum for the year.

Co-pays and deductibles are just two parts of the health insurance equation. In general, plans that charge lower monthly premiums have higher co-payments and higher deductibles. Plans that charge higher monthly premiums have lower co-payments and lower deductibles.