WHY DO I HAVE TO PAY AGAIN WHEN I NEED HEALTHCARE?
Do I have to make a ‘copayment’ for every service?
The Role of Copay in Health Insurance Plans
Is there a limit on how much I need to spend out of my own pocket?
Most households have their insurance premiums paid by a responsible family member through a group (usually an employer), and the cost of the premium is reflected in the paycheck. We may grumble, but it is an automatic deduction, and we are forced to plan (budget) around it. Most of us do not budget for the additional cost of the copayments we must make when we need a doctor, specialist, or prescription drug. WHY are we expected to pay extra? We have already paid our premium.
Look at it this way. Paying the premium on an ACA-compliant plan is somewhat like subscribing and paying to join a club (a health club). Your membership subscription entitles you and your family to use the facilities at any of the club’s branches (your APA-plan network) at more affordable prices than non-members. Take, for example, a golf club. Members join their local club and can play at any affiliated club and pay their green fees at a discounted rate. The same membership subscription (the monthly APA plan premium) entitles you to a price reduction on prescription medications in affiliated pharmacies (in our analogy, sports gear in selected sports goods shops.) You can, of course, choose doctors or specialists who are not in your network, but the ‘green fees’ will be higher
When discussing health insurance, we must distinguish between co-payments (co-pays) and coinsurance. To most of us, they are the same thing—they represent the amount we have to pay in addition to our premium when we see a doctor or specialist or need prescription medicine. In addition, we need to understand the meaning of ‘deductibles’ and ‘out of pocket’ limit.
Copayment (copay)
A copay, or copayment, is the amount insured individuals are responsible for paying (out of pocket) for a specified healthcare service or medication covered by their health plan when they visit a doctor or purchase prescribed medication. This amount is predetermined for providers in your network and set out in your health insurance policy. In other words, the cost of a copay is predictable. Your insurance provider pays the balance of the bill.
The same principle applies to certain medications, which may also be available as co-pay items when prescribed by your physician.
A visit to your primary care physician may have a copay of $25, and a specialist visit could be $50. The cost reduction of medication can be similar. Copays can vary widely based on the type of service and your specific insurance plan.
Do I have to make a ‘copayment’ for every service?
Your insurance plan will tell you what services are offered with co-pays and the amount payable for each service, but some essential health benefits are delivered FREE. I.e., Your ACA-compliant insurance plan must cover the cost of the service and the associated medication. For example,
Preventive care includes regular check-ups, vaccinations, female contraception, and screenings to detect health issues early and promote overall well-being.
Maternity and newborn care: Pregnant individuals receive coverage for prenatal care, labor, delivery, and postpartum services. Newborns are also covered for their initial healthcare needs.
The role of copay in health insurance plans
Copays are a crucial feature in many health insurance plans. They offer a predictable cost structure for routine care and encourage insured individuals to seek necessary treatment without fearing unpredictable or potentially unaffordable expenses.
Is there a limit on how much I need to spend out of my own pocket?
Yes, there are limits (safeguards) on how much you need to spend out of pocket. But first, we need to examine other elements of your health insurance plan.
Most common services and medications are covered by ‘copays,’ but more complex needs and hospitalization are not costed in the same way. Depending on your plan, you will pay a fixed percentage of the final bill, and your insurance will pay the balance. This is co-insurance. You and the insurance company share the cost.
Now, we can discuss the safeguards or limits on what you might have to spend during the year in addition to your monthly premium.
The first limit is your ‘deductible.’ This is the amount you spend on co-insurance and other covered services during the lifetime of your health insurance (usually 12 months). When you meet this limit, your insurance covers 100% of the cost of your insured subsequent treatment and medication. You will continue to have the advantage of co-pays, but they do not count toward your ‘deductible.’
The second limit is your OOP (out-of-pocket) maximum, which the CDC sets annually. For the 2024 plan year, the out-of-pocket limit for a Marketplace plan cannot be more than $9,450 for an individual and $18,900 for a family.
When you have an ACA-compliant plan, this is your ultimate backstop. Nobody wants to rely on a backstop. Talk to a qualified independent health insurance agent to get the most out of your health insurance plan.
