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Learning the Differences Between Types of Copayments

I’m sure we’ve all paid a copayment (copay) before. A copay is the amount of money you pay for a doctor’s visit, prescription, trip to urgent care, etc. There are actually 2 types of copayments: flat-dollar copays and percentage copays. Keep reading to learn the difference between them and what it can mean for your wallet.

Learn the differences between types of copayments

Most of us are probably familiar with what is called a flat-dollar copayment. This type of copayment is just like it sounds – it’s a flat dollar amount that you pay each time.

An example of a flat-dollar copay:

  1. Regular doctor’s office visit = $25 copay

  2. Specialist doctor’s office visit = $45 copay

  3. Emergency Room visit = $200

  4. Generic prescription = $15 copay

You pay your set amount and you’re on your way. However, there’s another type of copay called a percentage copay where you pay a percentage of the total cost instead of a set amount.

An example of a percentage copay: I’ll give you a real-life example using a medication one of our team members takes for low blood pressure.

The total cost for a 90-day supply of this medication is $188. Below you’ll see what her costs would be depending on which type of copayment she has. It’s a pretty big difference! In this case, a flat dollar copay was less than half the price of a percent copay.

Prescription Example

Are Your Prescriptions Part of Your Deductible?

Something else to look out for is whether or not your prescriptions are included in your medical deductible. If so, you’ll pay the full cost of your medications until you reach your deductible. So, in the above example, you would pay the full $188 for your prescription until you had paid your entire deductible amount.  Then, after that, you may pay a percentage copayment instead of a flat-dollar copay.

Not Just for Prescriptions

The example above was for a prescription medication. You could also have a percentage copayment on doctor’s office visits.

Consider this example:

You go to the doctor because you have a terrible cough and head /chest congestion. Your doctor wants to test you for the flu and do a chest X-ray to look for things like pneumonia. Below are the allowable charges for your visit:

  1. Chest X-ray = $45

  2. Flu test = $25

  3. Medical care = $79

If you have a flat-dollar copay, you’ll pay whatever that amount is, usually around $20-$50. Most of the time, you’ll pay this amount up front. For this example, let’s say your copay for a regular office visit is $35. If you have a percentage copay, you’ll be billed (or may possibly pay after you’ve seen the doctor) a percentage of the allowable charges.

Office visit example

In the example above, the flat-dollar copay was about $10 less than a percentage copay.

Why Does This Matter?

Healthcare is becoming something that you, as a healthcare consumer, can’t really ignore anymore. If you do, you will end up paying more. It’s as simple as that.

The Affordable Care Act has made millions of people healthcare consumers who have no experience with health insurance. They get to shop for and compare health plans, but are they prepared to do so? Slight variations like flat-dollar vs. % copay can mean a big difference to your wallet! By understanding the differences, you can make informed decisions that are right for your personal situation.

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