When the powers-that-be made health insurance complicated, one of the things they never explained is the difference between a copay and a deductible. But it turns out that it’s important to know, so you can be ready for when the expenses come.
The Short Answer
You pay a deductible once a year (per person, usually), while you pay a copay each time you need healthcare, no matter what. Read on for the details.
What Is A Copay?
A copay is a payment you make with every healthcare encounter you have. For example, if you visit a doctor and your copay is $25, you will pay $25 every time you visit that doctor, no matter how many times. You will also probably have set copays every time you get a prescription, or labs or a CT or MRI.
What Is A Deductible?
A deductible is a set amount of money that you have to pay every year, but is only paid once (per insured person, usually). Say, for example, that you have 3 persons on a health insurance plan (mom, dad, son), and each has a $1,000 deductible.
If mom gets an MRI and is charged $300 of the deductible, she will continue to be charged deductible money for most healthcare encounters, until she has paid $1,000. Then, she will not be charged any more deductibles for the rest of the year, but will continue paying copays. The next year, her deductible will be charged again from $0.
The same applies to dad and son. Each will be charged deductible payments until they each reach $1,000 for the year, and then will only pay copays.
I recommend that you find out how much your deductibles are, and then try to save that money so that you have enough, at the beginning of the year, to pay every person’s deductible. Since we all go to the doctor, it is highly likely that you will pay these amounts anyways over the course of the year, and high deductibles can bring nasty surprises. You are pretty much paying for healthcare cash until you meet your deductible.
One other thing. If you have several deductible payments in a row, sometimes your payments are not registered quickly enough and you get charged twice. For example, your deductible might be $400, and you might pay it all for an MRI on Monday, and then be charged $400 again for an ultrasound on Tuesday. This happens simply because your Monday payment has not yet registered in the necessary billing systems, and your Tuesday provider’s computer does not tell them that you have met the deductible. There are two ways to handle this.
Sometimes, the second provider will accept a receipt showing that you already paid your deductible to the first provider, and will not charge you. Therefore, bring your receipt.
Otherwise, you should be able to get a refund from your insurer for the overpayment. In that case, I recommend you wait a few weeks and, if you do not receive it, follow up.
Summing It Up
So, the difference between a copay and a deductible is that you pay the deductible amount once, while you’ll get charged the copay each time you get a service. Make sure to budget appropriately! It can also help to know your healthcare codes, which may be used to find out medical costs in advance.
Disclaimer: These are general principles. Always check your specific situation and insurance plan to find out what applies to you.