Table of Contents

Co-pays and Deductibles Explained: Key Differences in Health Insurance

By

Greg DePersio

Updated October 23, 2025

Reviewed by Eric Estevez

Fact checked by

Betsy Petrick

Part of the Series

Health Insurance Basics

Understanding Health Insurance: Coverage, Costs, and How It Works

Know the Basics

Learn the Lingo

What Does Health Insurance Cost?

Your Health Insurance Premium

Understanding Deductibles

Finding a Health Plan

Co-pays and deductibles determine how much you pay for medical care. A co-pay is a fixed amount you pay upfront for specific services, like a doctor’s visit or prescription, while a deductible is the total amount you must pay out of pocket each year before your insurance starts covering costs. Understanding how these payments work helps you plan for medical expenses and manage your overall healthcare budget more effectively.

Key Takeaways

Co-pays are fixed fees paid for healthcare services, while deductibles are amounts paid before insurance coverage kicks in.
After meeting a deductible, you typically pay co-insurance, a percentage of remaining costs, until your out-of-pocket maximum is met.
Preventive services are usually covered in full, meaning you don't owe anything for those appointments.
Plans with lower premiums generally have higher co-pays and deductibles, while more expensive plans offer lower costs and greater coverage.
High-deductible plans may be eligible for Health Savings Accounts (HSAs), which help manage healthcare expenses.

Co-pay vs. Deductible — Investopedia / Michela Buttignol

Understanding Co-pays: Your Out-of-Pocket Role

A co-pay, short for co-payment, is a fixed amount that a healthcare beneficiary pays for covered medical services. The remaining balance is covered by the person’s insurance company.

Co-pays typically vary for different services within the same plans, particularly when they involve services that are considered essential or routine and others that are considered less routine or in the domain of a specialist.

Co-pays are typically lower for standard doctor visits than for seeing specialists. Co-pays for emergency room visits tend to be the highest.

Navigating Deductibles: The Threshold of Insurance Coverage

A deductible is a fixed amount that a patient must pay each year before their health insurance benefits begin to cover the costs.

After meeting a deductible, beneficiaries typically pay co-insurance—a certain percentage of costs—for any services covered by the plan. They continue to pay the co-insurance until they meet their out-of-pocket maximum for the year.

Important

Some plans have a separate deductible for prescription drugs or other services. With family plans, there are often two deductibles: for an individual, and for the whole family.

Preventive Services: Maximizing Insurance Benefits

In most cases, preventive services are covered at 100%—meaning that the patient doesn’t owe anything for the appointment. Plans offered through the Patient Protection and Affordable Care Act pay in full for routine checkups and other screenings considered preventive, such as mammograms and colonoscopies for people over a certain age.

Real-Life Scenarios: Co-pays and Deductibles in Action

Consider a health insurance plan with a $30 co-pay to visit a primary care physician, a $50 co-pay to see a specialist, and a $10 co-pay for generic drugs.

Patients pay these fixed amounts for those services regardless of what the services actually cost. The insurance company pays the remaining balance (the “covered amount”). Therefore, if a visit to an endocrinologist (a specialist) costs $250, the covered patient pays $50 and the insurance company pays $200.

Now, consider a policy with a $2,000 annual deductible before insurance starts to pay, and 20% co-insurance after that.

If a patient sprains an ankle and treatment costs $300, that patient would pay the full cost because the deductible has not been met. For additional treatments later that same year costing $500, the patient still pays the full cost.

Yet another hospital visit later the same year comes to $3,500. On this bill, the patient pays $1,200—the balance of the deductible. Once the deductible is met, the patient pays 20% (the co-insurance amount) of the remaining balance. In this case, that would be an additional $460 (20% of $2,300—the difference between the deductible and the hospital visit). The insurance company would cover the remaining $1,840.

Is a Co-pay the Same as a Deductible?

No, but the two terms are often confused.

A co-pay is a fee that you pay when you receive healthcare services, such as visiting a doctor or picking up prescriptions. Your health insurance company will pay part of this cost, and you will pay the rest. A deductible is a set amount that you must meet for healthcare benefits before your health insurance company starts to pay for your care. Co-pays are typically charged after a deductible has already been met. In most cases, though, co-pays are applied immediately.

What Is an Average Deductible?

This will depend on your personal circumstances, but a high-deductible plan is generally regarded as any plan that has a deductible of $1,400 or more for an individual or $2,800 or more for family coverage. Plans with lower deductibles will have higher monthly premium costs.

Though high-deductible plans usually cost you more in out-of-pocket expenses, they can have advantages that offset that cost. Generally, high-deductible plans qualify for a Health Savings Account (HSA), which can help you to save for and manage healthcare costs.

What Does 100% After Deductible Mean?

You might see this phrase on the paperwork relating to your health insurance, and it can be confusing. This means that you will not have to pay a co-pay after you reach your deductible, because, after that point, your insurance company will pay for all of your healthcare costs.

The Bottom Line

Choosing the right health insurance plan often comes down to balancing premiums with the out-of-pocket costs like co-pays and deductibles. Plans with lower premiums generally have higher deductibles, meaning you’ll pay more when you need care, while higher-premium plans reduce those costs. The best choice depends on your expected medical needs and budget, which means if you're a frequent healthcare user, you may benefit from higher premiums and lower out-of-pocket costs. If you're a healthy individual, you may save more with a lower-premium plan.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

U.S. Centers for Medicare & Medicaid Services. “Copayment.”
U.S. Centers for Medicare & Medicaid Services. “Out-of-pocket Maximum/Limit."
U.S. Centers for Medicare & Medicaid Services. “Deductible.”
U.S. Centers for Medicare & Medicaid Services. “Preventive Care Benefits for Women.”
U.S. Congress. “Compilation of Patient Protection and Affordable Care Act.”
U.S. Centers for Medicare & Medicaid Services. “Preventive Care Benefits for Adults.”
U.S. Office of Personnel Management. "FAQs for High Deductible Health Plans, HSA, and HRA."
U.S. Centers for Medicare & Medicaid Services. “What Are HDHPs & HSAs?”