Copay is a payment made by a patient to healthcare providers for a specific service, while a deductible is the amount a patient must pay before major services are covered. Copays are usually paid at the time of service, while deductibles are calculated annually. Insurance companies may cover copays before the deductible is reached, but deductibles must be met before major services are reimbursed. Some insurers also have a maximum amount that a patient must pay per year or for life.
The terms copay and deductible can be confusing for some people, as they are related. A copayment can be referred to as a service payment point, something a patient would give to physicians, other allied healthcare providers, and possibly laboratories when they receive service. In contrast, the deductible is the amount of money a patient must pay before major services are covered, usually things like hospitalizations or surgery.
Copays are part of a patient’s payment for a particular bill and something they usually have to bring with them to the time of service. Rates vary depending on the type of service a person is receiving and the type of insurance they have. This is the patient’s payment share of that particular visit.
Like copays, deductibles can be highly dependent on the type of insurance a person has. These amounts are usually calculated on an annual basis, however, and once the total is reached, your insurance should cover the rest of the payments, up to a certain point. Every year when the insurance policy is renewed, the patient must start over, paying again until the deductible is reached.
For example, if a deductible is $500 US Dollars (USD), this means that, before the insurance company starts paying for services, the patient must pay $500 USD out of pocket. If he went to the hospital for surgery, the first $500 USD of that bill would be directed to him, and he would have to pay that amount before the insurance company started paying. Usually deductibles are higher than this, on the order of several thousand dollars.
This is where the difference between copay and deductible gets extremely complicated. In most cases, when a patient has both, the insurance will cover their share of things like doctor visits before the patient reaches the deductible limit. Therefore, when the new insurance year begins and the patient visits a doctor, he is usually only responsible for the copay and not for the deductible amount.
If that patient needs a major or minor operation, however, they would have to meet that deductible before being reimbursed for the remainder of these expenses. Also, in many cases, insurance companies don’t count copays as part of a patient’s deductible expenses. Many insurers charge something other than the copay and deductible and require people to pay a percentage of certain expenses. This may also be considered a ticket by some insurers.
Again, from the example of a new insurance year, a patient may need to meet a $1,000 USD deductible and then also pay a percentage of the outstanding amount owed for service, which may be called a co-pay. If you have surgery and it costs $26,000 USD, the first $1,000 USD is your responsibility alone. On the remaining amount, he could owe a percentage, say 10%. In total, your surgery bill would be $1,000 USD plus $2,500 USD, equaling $3,500 USD.
Some insurers also offer a maximum amount that a patient must pay in terms of costs per year, which can be the same amount as the deductible. If you have a long hospital stay, your insurer may only ask you to pay up to that maximum. So, for example, if the maximum amount a patient must pay per year is $2,000 USD, all costs beyond that point could be covered. Other insurers give a maximum amount they will pay out within a given year or for life. If a patient’s medical expenses exceed this amount, he will have to pay all expenses in addition to this amount.
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