Copay vs. deductible: What’s the difference?

When it comes to health plans, you’ll typically deal with things like copays and deductibles as well as coinsurance and out-of-pocket maximums.

It can get a little confusing, right? But whether you’re already a policyholder or you’re shopping for health insurance, it might help to think of it this way: Each plays a role in when you pay—and how much you pay—for medical services versus what your plan pays. 

Key takeaways

• Copays and deductibles are both expenses associated with health insurance plans.
• A copay is a fixed payment, typically for things like doctors’ visits and prescriptions.
• A deductible is how much plan holders pay for covered services before their insurance plan starts to share costs. 
• Copays might still be required, even after the annual deductible is met.
• Coinsurance and out-of-pocket maximums are other costs associated with health insurance plans.

An insurance deductible is the amount a policyholder has to pay for covered health care services before their insurer starts to share the cost. If you have a $2,500 deductible, for example, you’ll pay that full amount for covered services before your plan kicks in. 

Once you reach your deductible, you’ll generally owe only a copay—you’ll read more about copays shortly—or coinsurance for covered services. The rest will typically be paid by your plan. 

Some plans may have multiple deductibles. For example, some may have additional deductibles for certain services like prescription drugs. And family plans can have one deductible that applies to all family members, and another deductible that applies to each individual.

Deductible amounts can vary widely between insurance providers. They may also depend largely on the specifics of a policyholder’s coverage. 

The Kaiser Family Foundation (KFF) compiled 2022 deductible information for individual coverage provided by employers in the U.S. In that year, the average deductible was $1,763. 

A copay is a fixed amount that health insurance plans require their customers to pay for services like doctors’ visits and prescriptions. The term is short for “copayment.” Copays are usually paid when services are received.

You’ll typically still need to make copays even after you meet your plan’s annual deductible. You may be able to stop once you reach your out-of-pocket maximum—that’s the cap on how much you’ll be required to pay for covered medical services in a plan year.

Here’s an example: Say you see your doctor for an office visit and pay your plan’s $35 copay. If the appointment included services that aren’t covered by the copay, and you haven’t reached your out-of-pocket maximum, here’s what you might owe:

• If you haven’t met your deductible: You might receive a bill for the additional services. But that amount could be applied to the deductible.
• If you’ve met your deductible: You might pay coinsurance, which is a percentage of the cost of the additional services. The plan might pay the rest.

Health insurance plans may charge different copays for different services. For example, the copay for visiting a specialist could be different from the copay for a lab test. And different types of medical facilities may charge different copays. For instance, copays may be higher for an urgent care center versus a standard doctor’s office.

In general, plans with lower monthly premiums come with higher copays. Conversely, plans with higher monthly premiums come with lower copays. 

Not all health insurance plans include copays. That information should be available in a plan’s enrollment materials. 

When a plan includes copays, services that require them may include prescriptions, doctors’ visits and emergency room visits.

By law, private health care plans have to offer certain preventive services, like health screening tests, at no cost to their policyholders—that typically means no copays. Keep in mind that for these services to be covered, the physician or health care provider might be required to be in a plan’s network. 

Copays and deductibles are different types of payments typically associated with health insurance plans. What they have in common is that they’re both out-of-pocket expenses you may be required to pay when you use your plan for medical services.

A deductible is the fixed amount you’ll typically pay for medical services in a plan year before your insurance starts to share costs. A copay is also a fixed amount, but it’s the fee your plan may require you to pay for certain covered services like prescriptions and doctors’ visits.

Check out these FAQ for more about copays, deductibles and other costs that can be part of a health insurance plan:

Whether you’re a health insurance policyholder or someone who’s shopping for health insurance, you’ve probably heard about copays and deductibles. They’re part of the total amount you may have to pay for medical services under your plan, but they’re not the same.

Understanding the difference could put you on the road to being a better-informed health care consumer. You may be able to better understand your policy, manage your ongoing health care expenses, and even get a handle on how to pay medical bills.