Deductible or Copay

August 5, 2006 by bob.

Q. What is the difference in a deductible and a copay? Aren’t they the same?

A. This just proves that sometimes agents take things for granted and assume what we know is common knowledge.

This question comes up more often than it should which shows that many people really don’t understand their coverage. This seems to be more prevalent in employer sponsored plans vs. those purchased individually.

In simple terms, a copay is a per occurrence “fee” that must be paid before insured benefits kick in. An example is a doctor visit copay. If your plan has copays, and not all plans do, you are required to pay a small fee, usually $20 - $40, everytime you visit the doctor. This fee is assessed for all visits, usually without a limit.

Some individual plans in particular will limit the number of copay visits to 2 or 6 visits per year. After that limit is reached you will pay the full charge and that amount paid is credited toward your annual deductible.

The deductible is almost always an ANNUAL fee that must be paid before benefits are available. Typically many plans have a $100 - $300 Rx deductible before you can take advantage of Rx copays. Major medical expenses, such as hospital admission, radiological testing or surgery will incur a deductible of $500 - $5000 before the carrier pays any benefit.

Most deductibles are per person, and assessed only once per year. Some plans have a FAMILY deductible rather than per person. A few carriers have a per HOSPITAL ADMISSION deductible and some have a per ILLNESS or per ACCIDENT deductible. You want to avoid these plans entirely.

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