How Do Health Co-Payments Work?

When evaluating the overall costs of a health insurance plan, consumers should not only consider the monthly premium and deductible, but also the cost of the health co-payments often associated with doctors appointments and filling prescriptions. Before a health insurance company will pay any portion of the benefits for a policy, typically a co-payment must be made. The health co-payment is paid by the insured before any type of service will be rendered.

The co-payment amount contributes only a small amount to the cost of the medical attention the insured is seeking. Health co-payments work as a way to discourage those participating in a health insurance plan from seeking unnecessary medical attention. For example, if you know you are suffering from a common cold, you probably wouldnt pay to see the doctor just to have them confirm what you already know.

Despite charging monthly premiums and requiring patients to meet deductible amounts, co-payment is another way to offset the costs of providing medical care. Insurance companies use them as a way to show the value of a service. The standing theory is if people are forced to pay a co-payment, they will realize the costs associated with health care and use more discretion when seeking medical attention.

Co-payments also apply to the cost of prescription drugs. Consumers may notice that if they opt for a generic drug over a comparable name brand, their co-payment amount may be substantially less. Many health insurance companies no longer charge a fixed rate for those who choose to go for the expensive drugs versus generic choices. Instead, insured people may find that their health co-payments for drugs will depend them paying a percentage of the drug’s overall cost.