Table of Contents

Understanding Copays in Health Insurance: Definition and Examples

By

Julia Kagan

Updated August 23, 2025

Reviewed by

Doretha Clemon

Fact checked by

Maddy Simpson

What Is a Copay or Copayment?

A copay, or copayment, is a fixed amount you pay upfront for health services under your health insurance plan. This fee varies by service type—such as doctor visits or prescription drugs—and differs based on in-network or out-of-network providers. Copays are typically part of your out-of-pocket expenses and may vary, offering a cost-sharing method between you and your insurer.

Key Takeaways

A copay is a fixed fee paid by the insured at the time of receiving a covered medical service, such as a doctor’s visit or a prescription.
Different health services can require varying copays; for example, seeing a specialist might have a higher copay than a primary care appointment.
Copays are usually smaller fixed amounts and are charged per service, unlike deductibles, which are annual out-of-pocket expenses before insurance kicks in.
While some healthcare visits may not need a copay, using out-of-network providers generally results in higher copays.
Health insurance plans with lower monthly premiums often have higher copays, reflecting a balance between upfront cost and service charges.

Copay: A fixed dollar amount a patient must pay upfront as part of their health insurance coverage for covered medical services such as prescriptions, tests, and visits to a doctor or an emergency room. — Investopedia / Mira Norian

Understanding Copay Mechanisms

Copay fees are a cost-sharing method used by patients and health insurance providers for healthcare services. A copay is an upfront fixed amount that the patient must pay out of pocket at the time of service.

Here are some examples of healthcare situations that may require a copayment:

Primary care doctor appointment
Prescription purchase
Lab test or blood test
Hospital stay
Imaging tests, such as an X-ray or MRI
Specialist appointments, such as a cardiologist or oncologist

Copays are usually small fees, not a percentage of healthcare costs, but they can vary by insurer and service type. Your copay may be higher for specialists or hospital stays than for routine check-ups.

Not all medical services require a copay. For example, some insurance companies do not require a copay for annual physicals. However, insurance providers may charge higher copays for appointments with out-of-network providers. Be sure to check your insurance plan for how much out-of-network providers charge for copays, especially if you make recurring visits.

Practical Example: Jane's Health Insurance Copays

Let's say that Jane has recurring back pain and visits her primary care doctor, which requires a $20 copay for the visit. The doctor refers Jane to a specialist, and, at the time of the appointment, Jane's insurance requires a $50 copay to see a specialist.

Later that month, Jane visits the emergency room for back pain, where she is charged a $100 copay. The next day, Jane goes to her local pharmacy to pick up the medication prescribed by her specialist and pays a $10 copay for the prescription.

Tip

Copay amounts can change annually. Be sure to check with your health insurance provider or HR department at the start of a new year to determine if your copays have increased. Copays are normally listed on your insurance card.

Copays and Their Impact on Insurance Premiums

Your monthly insurance premium is the amount you pay to keep your health insurance plan active. Typically, plans with relatively high premiums come with lower copayments, while plans with low monthly premiums come with higher copays.

The Interaction Between Copays and Deductibles

A deductible is the portion of your healthcare costs that you're responsible for paying out of pocket each year. The insurer will not pay a claim until your deductible has been reached.

For example, if you have a high-deductible health plan and your annual deductible is $5,000, you must pay for all medical expenses each year (including prescriptions, lab tests, and doctor visits) until you've paid $5,000. Once your out-of-pocket expenses reach $5,000 out of pocket, your health insurance covers your healthcare costs. However, you will still owe a copay if your insurance plan requires it.

Let's say your copay is $20 per medical visit. You see a physician, and the appointment costs $200. If you have not reached your deductible, you would pay for the entire appointment or $200. However, if you have reached your deductible, you will still pay the copay of $20.

With family coverage, all members have copays for visits unless they're not required, like for annual physicals.

Fast Fact

Deductibles and copayments are two different types of payments that you pay rather than your insurance company.

Navigating Copays and Coinsurance: Working in Tandem

Coinsurance is another type of out-of-pocket expense under your health insurance. Rather than being a fixed fee amount such as copays, coinsurance is a percentage of the total visit cost. In some cases, health insurance policyholders pay both a copay and coinsurance for the same medical appointment.

For example, imagine you receive a filling from a dentist. Your health insurance plan requires you to pay a $20 copay for every dental appointment and a 20% coinsurance fee for fillings. If the dentist visit costs $200, you would owe a $20 copay and a $40 coinsurance fee (0.20 * $200) for a total of $60 for the appointment.

Important

If your health insurance has a deductible and coinsurance, you must first satisfy the deductible by paying 100% of your healthcare costs. Once your deductible has been met, you'll pay the percentage of coinsurance for any covered healthcare services.

What Does Having a Copay Mean?

A copay is a fee that you must pay upfront for a doctor's visit or if you purchase a prescription. For example, if you visit your primary doctor, you might have to pay $20 at the time of the visit.

What Is the Purpose of a Copay?

Copays are a way for the insurance company and the insured to share the cost of medical expenses. Splitting your medical bills helps the insurance company reduce its expenses while still allowing you to avoid the full burden for your medical bills.

What Is the Difference Between a Copay and a Deductible?

A deductible is an out-of-pocket cost for your healthcare costs that you must pay annually before your insurance will pay for any medical bills or prescriptions. (For example, if you have a $1,000 deductible, you must pay all healthcare costs until you've paid $1,000, after which your insurance kicks in.) A copay is a flat fee you pay out of pocket for services, such as appointments and lab tests, once you've met your deductible.

What Does a $100 Copayment Mean?

A $100 copayment or copay is a flat fee that the patient must pay for a covered service by an insurer. For example, if you have a $100 copay for tests such as an X-ray, you must pay $100 at the time of the exam.

The Bottom Line

A copay, or copayment, is a fixed fee that patients must pay out-of-pocket at the time of receiving a healthcare service, as part of their insurance plan. Copays vary based on the service type; They tend to be lower for primary care visits than for specialist appointments, imaging tests, or emergency room visits.

Remember to review your health insurance plan to understand how copays affect your out-of-pocket costs, and note that copays may differ for in-network and out-of-network providers."

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.

Blue Cross and Blue Shield of Minnesota. "What Is a Copay?"
Cigna. "Copays, Deductibles, and Coinsurance."
Healthcare.gov. "Copayment."
HealthCare.gov. "Deductible."
Centers for Medicare & Medicaid Services. "No Surprises: Health Insurance Terms You Should Know." Page 1.

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