What is the difference between a co-pay and a deductible?

If you've recently been in an accident, you may already know the difference between an insurance co-pay, and your insurance deductible. However, not everyone may understand the difference and how they affect what you pay for health coverage.

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When choosing insurance plans, either in the marketplace or through an employer, you will see different amounts for co-payments (or co-pays) and for deductibles. The cost for these two different items are related, mostly because they are a part of your insurance coverage.

So, what is the difference between a co-pay and a deductible?

A co-pay is the fixed amount you pay each time you have a specific health related visit with a specialist. For instance, if you have a $50 co-pay with a primary care physician (or PCP) any time you visit your PCP you would pay $50. If you have a $20 prescription co-pay, you'll pay $20 for generic prescriptions. These services cost more than this, and your insurance company typically pays the rest of the bill.

A deductible is the fixed amount you can pay toward health coverage for the year. Think of deductibles like a ceiling, you will pay no more than the total deductible for the year in health care bills. If you have a $3,000 deductible, but break your leg and owe the hospital $5,000 dollars, you will pay $3,000 while your insurance company pays the rest. Any other bills you accrue for the remainder of the year (that aren't co-pay's) will be taken care of.

The Affordable Care Act (aka, Obamacare) caps your total deductible cost per year at $7,150 per individual, or $14,300 per family. While this seems like a lot, serious injuries due to car accidents add up quickly.

Having a higher deductible amount runs the risk of being caught with more bills in the case of a medical emergency or unexpected hospital visit.

While co-pay's and deductibles are all paying for health care coverage, it's also important to know that your co-pay's usually won't count toward reaching your deductible limit. Many health care coverages offer a lower co-pay amount, if you're willing to risk a higher deductible amount, increasing your out of pocket expenses in the case of emergency.

If you've been in a car accident, and your health care bills are adding up, call us so we can help sort it out. You don't have to do it alone.

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