What Is The Difference Between A Co-Pay And A Deductible?

I get a lot of patients coming in for care and they are confused about what a deductible and a co-pay are.  Here is a bit of a breakdown to help anyone understand the difference.

What is a CO-PAY?

A co-payment, or co-pay, is a flat amount paid for each visit to a doctor’s office or portion you pay for medication.   This is paid when you are seen and receive treatment, an exam or have a consultation.

Every health insurance company has different co-pays depending on the plan.  Most of the time they are printed on your insurance card.  There can be different co-pays for each profession you go to, for example, a Chiropractor is a “Specialist” and have a certain co-pay specifically for them.  A dentist may have another amount along with a Physical Therapist.  It all depends on your plan.  In addition to cutting a small portion of the costs by having you pay a portion for each visit, having a co-pay will also prevent people from seeking care for problems they consider trivial just to get the most out of the insured’s dollar or seek care for something a bandaid would be used for.

However, while the co-pay does lower costs for the insurance companies, by making people more mindful about when it is necessary to go to the doctor, It may also prevent people from getting medical attention when they may need it. For example, it can be costly for a person that has a long term problem and needs to see several doctors in a week for it or see one doctor several times a week or a month, if they have a $25.00 co-pay each time and can’t afford it, they may choose to see what happens and then the condition may worsen making it necessary for invasive treatments, x-rays, MRI or other necessary tests that can cost thousands of dollars.

What is a DEDUCTIBLE?

A deductible is a fixed amount of money you have to pay before your co-pay kicks in and your full policy benefits can be utilized.

The amount of a deductible is normally calculated on a yearly basis and most policies restart in January and the deductible is then back up to its full amount.   Before you meet the allotted amount of your deductible, you have to pay the full price of the doctor bill.  Once you meet your deductible, then the co-pay is all you need to pay.  There are individual deductibles for single policy holders and family deductibles for families and both differ in price.

Normally, if your plan has a high deductible, it has a lower monthly cost.  So, just know that if something happens and you need care, it will be pricey.  If you are normally healthy and don’t see a doctor often this may be a plan you want to take your chances with.  However, if you are someone who is sick often, has a large family, or like to see a doctor more than the average person, you may want to get a lower deductible plan and pay a bit more each month for insurance.

A deductible is also considered an what is called an “out of pocket” expense and can work toward working this off.  In general, an out-of-pocket expense maximum is the amount you need to meet for paying for your doctor’s appointments before they will pay 100 percent of your health expenses. Normally, your deductible and coinsurance can be applied toward this maximum amount. Your co-payments or monthly insurance premiums are not included in “out of pocket” expenses.

What Does Co-Insurance Mean?

Coinsurance is used in several different types of insurance and is different depending on the type of insurance you choose. The way it works is basically instead of having a “set” amount to pay each time you see a doctor (after your deductible is paid), you instead pay a percentage for each visit.  This can be as little as 10% to 80%.  Then the insurance company pays a the remaining percentage to the healthcare provider.

Hope this helps!