Do copays count toward your health insurance deductible?

When health insurance deductibles are often calculated in thousands of dollars, a copayment—a fixed amount (usually between $25 and $75) owed each time you go to the doctor or get a prescription—may look like It’s change.

However, the copay does increase when you have ongoing health conditions. For more expensive services, such as urgent care and emergency room visits, copays may be $100 or more. You may be wondering: Do copays count towards your health insurance deductible? Are you cutting a huge deductible every time you pay a $30 copay for a thyroid or cholesterol prescription?

This article will explain what you need to know about how this usually works, but you always need to read your own policy details carefully to make sure you understand exactly how your specific coverage is structured.

When you think about your health insurance deductible (often a few thousand dollars), you naturally cringe. Budgeting for your health insurance deductible has become a necessity for the financially savvy but not wealthy. However, if you don’t understand what exactly it is, it can be difficult to track your progress towards reaching your deductible.

Whether your copays count toward your deductible depends on how your health plan structures its cost-sharing requirements. Most plans don’t count your copays toward your health insurance deductible. However, your plan may. Cost-sharing requirements for health plans change from year to year as health plans look for new, cost-effective, and consumer-friendly ways to structure cost-sharing requirements.

How are you sure? First, check your benefit and coverage summary. Pay close attention to the math in the example. If you are still not sure, you may need to call the membership number on your health insurance card to ask.

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But in general, you should expect your copays to not count toward your deductible. However, they will count towards your maximum out-of-pocket costs (unless you have a grandmother or grandfather plan that uses different rules for out-of-pocket costs).

Copays can add up quickly

Copays add up. Even though your plan might not count them toward your deductible, it will almost certainly count them toward your maximum out-of-pocket limit. Once you hit that cap (which can be a combination of copays, deductibles, and coinsurance), assume you use an in-network provider and follow any rules your plan has, such as prior authorization or step-by-step treatment.

Most health plans apply the cost of certain services to deductibles and use copays for separate services, which means your copay and deductible obligations generally do not apply to the same services.

But keep in mind that two different “services” can be performed at the same time, such as office visits that include lab work. In this case, there may be a co-payment for office visits and separate costs for lab work that count towards your deductible.

Suppose your health insurance is structured as follows:

  • $1,000 deductible
  • $30 copay to see a primary care doctor
  • $60 copay to see a specialist
  • $25 copay on generic drug prescriptions
  • $45 copay for prescriptions for brand-name drugs

In January, you were diagnosed with diabetes. You meet 3 times with your PCP and are prescribed one generic and one brand-name drug. Your copay for January is $30 + $30 + $30 + $25 + $45 = $160.

Your PCP is not satisfied with your diabetes control, so in February, she sends you to see an endocrinologist, a doctor who specializes in diabetes and hormone problems. You see a specialist and refill your two prescriptions. Your copay for February is $60 + $25 + $45 = $130. But endocrinologists also ordered a series of tests and labs, Specialist office visit copays do not cover these as they are counted towards your deductible. You end up paying $240 for the test, which will count toward your deductible.

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In March, you will see an endocrinologist twice. She changes your prescription; you are now on two brand-name drugs. Your March copay is $60 + $60 + $45 + $45 = $210. In March, your endocrinologist also ordered another exam for $130 (again, this counts toward your deductible, which you must pay in addition to your co-pay for the doctor visit).

By the end of March, you paid a total of $500 in copays for visits and prescriptions, plus a $370 deductible. You’ll still need to spend $630 (excluding copays) to meet the deductible for the year.

ACA-compliant plans count co-pays toward your out-of-pocket maximum

Although it is rare to encounter plans that count copays as deductibles, all ACA-eligible plans include copays (for services considered essential health benefits) toward your annual out-of-pocket maximum, And there are caps on how high your maximum out-of-pocket costs can go, assuming you get all of your care from providers in your health plan’s network.

As long as your plan is not a grandfather or grandmother, a person’s total in-network out-of-pocket costs in 2022 will not exceed $8,700. By 2023, this limit will increase to $9,100.

Most health plans have out-of-pocket limits below these caps, so your plan may have a much lower cap on your in-network out-of-pocket costs for the year. (Note that Original Medicare (without supplemental coverage) works differently and has no cap on out-of-pocket costs.)

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Most people don’t end up hitting their maximum out-of-pocket expenses for the year. But if you do, it can be any combination of copays, deductibles, and coinsurance to get you to the limit. If you have many services that apply a co-payment, you may end up hitting your out-of-pocket limit only because of the co-payment without meeting your deductible (in which case you do not have to meet your deductible ) years, even if you subsequently need care later in the year where the deductible normally applies).

In the example above, if you spent the $500 copay and $370 deductible by the end of March, then you’ve spent $870 on your plan’s maximum out-of-pocket total for the year. But depending on your plan structure, you may have a few thousand dollars left before your plan starts to cover 100% of your care for the rest of the year.

generalize

As a general rule, copays don’t count toward a health plan’s deductible. Copays generally apply to some services, while deductibles apply to others. But both count toward the plan’s maximum out-of-pocket limit, which is the maximum the person must pay for their covered in-network care during the plan year.

VigorTip words

Whenever you get a new health plan, it’s a good idea to take a close look at the details of how the plan’s cost is shared. This will give you a good idea of ​​what to expect when you need medical care, whether it’s minor (usually covered by copays) or serious (more likely to be affected by deductibles and coinsurance).