The co-pay is an essential part of health insurance, working as a tool of ultimate simplicity for policyholders with various types of plans. Co-payments allow you to pay a predictable rate for common services covered by your medical insurance policy instead of wondering how much you will be charged once the claim processes. Whether you have an HMO through your employer or an individual HMO or PPO with first-dollar benefits, co-payments give plan members a much easier time keeping track of their health care payments.
Co-payments are convenient for the other parties involved with paying for medical services as well. Providers and insurers are co-pay supporters due to the fact that having a set cost could potentially eliminate unnecessary visits and even avoid errors in the claims process. It is also a key method in the efficient delivery of managed care to millions of people in America each day. Health care services for a fixed price leaves insurers no questions, and providers with instant payment.
How Co-payments Work
The most common service where you will use a co-pay, regardless of the type of plan you have, is a doctor’s office visit. The process of paying for a non-preventive office visit (when you are sick or injured) begins with presenting your insurance card to the provider, which will likely have your co-pay amounts for various services listed on the front.
After running your card through for verification, the provider will ask for the amount of money indicated on your card. You provide the co-payment of $20 or so on your way out, and your responsibility is over. Your insurance company pays the remaining amount for the service when the provider sends a bill for the service. When your copay is a fixed dollar amount, the payment process is as simple as checking your insurance card or consulting your schedule of benefits.
History of the Copay
In an effort to control health care costs by placing limits on care, the copayment was born. Health insurance companies were sure that by implementing such a system would prevent insured people from using too much medical care, seeking unnecessary treatment and wasting money. Afraid that people would view their insurance as an excuse to run to the doctor when they had a minor headache or a rug burn, copays were the defense against potential misuse.
Because you would have to pay upfront for a portion of your services rendered, it was thought that this would discourage individuals from melodrama and reserve their medical care for more serious circumstances. Over the past 40 years, researchers have studied parallels between co-payments and overall health. Results proved that the amount of the copayment had little effect on the quantity of services being obtained, or stop people from receiving unnecessary care.
The copay has had an impact on controlling the amount of low-income and sick individuals receive care, however. In implementing the co-payment, a large section of our population was pushed a slight bit further away from health care access. Making it too costly for individuals with conditions and illnesses, easing them into government coverage, co-pays helped insurers get more selective with their customer base.
- Pay for medical care at a flat rate.
- No surprises. You know the cost in advance.
- Prescriptions at a cost comparable to over-the-counter.
- Immediate access to services for a reasonable rate.
- Uncomplicated payment method.