Loading the player...

What is 'Co-pay'

A standard feature of many health insurance plans, a co-pay is a fixed out-of-pocket amount paid by an insured for covered services. Insurance providers often charge co-pays for services such as doctor visits or prescriptions drugs. Co-pays are a specified dollar amount rather than a percentage of the bill, and they usually paid at the time of service.


Co-pay fees vary among insurers but typically are $25 or less. For example, an insurance plan with co-pays may require the insured to pay $25 per doctor visit or $10 per prescription. Review the terms of your insurance plan to determine your co-pay option. If there is a co-pay option, it may include different fees for physician visits, emergency room visits, specialists' visits, and other medical services. Insurance providers often charge higher co-pays for appointments with out-of-network providers. 

How Do Co-pays Affect Insurance Premiums?

A premium is an amount paid for an insurance policy. In most cases, plans with relatively high premiums are likely to have low co-pays, while plans with low premiums are more likely to have high co-pays.

How Do Co-pays and Deductibles Affect Each Other?

A deductible is an amount an insured pay out-of-pocket before an insurance company pays a claim. For example, if you have a $5,000 deductible, you will spend the entirety of your medical expenses until you reach that $5000 limit. At that point, your insurance company covers the costs, less your co-pay or co-insurance costs.

For example, imagine your co-pay is $20 per medical visit. You see a physician, and the cost is $200. If you have not reached your deductible, you pay for the entire appointment. If you have reached your deductible, you will pay only the co-pay of $20.

How Do Co-pays and Co-insurance Work Together?

Co-insurance is another out-of-pocket expense many health insurance policyholders pay. Rather than being a fixed fee amount as with co-pays, co-insurance is a percentage of the total visit cost. In some cases, health insurance policyholders pay both a co-pay and co-insurance for the same medical appointment. For example, imagine you receive a filling from a dentist. Your insurer charges a $20 co-pay for every dental appointment, and it levies a 20% coinsurance fee for fillings. If the dentist costs $200, you pay $20 co-pay and $40 co-insurance for a total of $60 for the appointment.

  1. Co-Insurance

    Co-insurance is the amount an insured must pay against a claim ...
  2. Out-Of-Pocket Expenses

    An expense incurred and paid for by an individual for personal ...
  3. Balance Billing

    When a health care provider bills a patient for the difference ...
  4. Life Insurance

    A protection against the loss of income that would result if ...
  5. Health Insurance Marketplace

    Organizations that facilitate structured and competitive markets ...
  6. Annual Renewable Term (ART) Insurance

    A form of term life insurance that offers a guarantee of future ...
Related Articles
  1. Insurance

    Co-insurance vs. Co-pay: The Difference Matters

    When looking at co-insurance vs. co-pay healthcare policies, understanding the difference could save you a bundle on medical and dental expenses.
  2. Investing

    Affordable Care Plans: Bronze, Silver, Gold, Platinum?

    How to choose among the different coverage levels in the Health Insurance Marketplace. Which metal makes the most sense for you?
  3. Retirement

    Medicare Part D Is Changing How You Pay for Drugs

    As the price of prescription medication rises and the population ages, insurers are looking for ways to cut costs. That's where coinsurance comes in.
  4. Insurance

    Getting The Most From Your Health Insurance Policy

    Don't get stuck with high out-of-pocket costs. Read on to see how you can save your money.
  5. Retirement

    Top 5 Costliest Health Issues Retirees Face

    The healthcare system today is murky, with plans changing what they cover. What are the costliest out-of-pocket or underestimated healthcare expenses that retirees need to watch out for?
  6. Insurance

    Buying Private Health Insurance

    Getting your own policy isn't easy or cheap but in some cases, it's well worth the effort.
  7. Retirement

    Pitfalls of Medicare Advantage Plans

    A Medicare Advantage plan may help you lower health costs not covered by Medicare. But there are definite tradeoffs, compared to classic Medicare/Medigap.
  8. Insurance

    How Does Dental Insurance Work?

    Learn how dental insurance policies work and what to look for when comparing policies so you are not surprised by unexpected charges.
  9. Managing Wealth

    Find the Best Medigap Plan for You

    Picking a plan to fill in the “gaps” in Original Medicare from the alphabet soup of options can be daunting. Here are guidelines that can help.
  1. What happens if my insurance claim falls below the deductible level?

    Find out what happens if your insurance claim falls below the level of your deductible, including the basics of deductibles, ... Read Answer >>
  2. What is the range of deductibles offered with various health insurance plans?

    Explore the wide range of deductibles available on various health insurance plans, and learn factors to consider when selecting ... Read Answer >>
  3. Is it more important to have a low deductible or a low premium?

    Explore the balancing act that exists between insurance deductibles and premiums, and learn the primary factors to consider ... Read Answer >>
  4. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  5. How is the deductible I paid for my insurance claim treated for tax purposes?

    Find out how your health insurance deductible is treated for tax purposes and under what conditions you may be able to deduct ... Read Answer >>
Hot Definitions
  1. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  2. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  3. Entrepreneur

    An entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture.
  4. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  5. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  6. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
Trading Center