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Health Insurance Copay Warning!

Filed under: Private Health Insurance — Tags: — Alston @ 8:04 pm March 19, 2010

If the only health insurance copay you are familiar with is the small fees you pay to the pharmacy, please read on. Copays can be hundreds of dollars!

A health insurance copay is a flat fixed amount that you pay on a per service or per prescription basis. Since most people’s involvement with medical insurance copays is limited to relative pocket change, many fail to realize that copays can be much higher. Copays can cost your family thousands of dollars over the course of a year.

Medical insurance copays aren’t just for doctors’ visits and prescription drugs. You may find that your policy has a $75 copay for walk-in clinic visits or a $500 a day copay in the hospital. You should know exactly what your copays are and what they apply to before you purchase any health insurance policy.

Another thing that most people are unaware of is that the out-of-pocket maximum or stop loss provision of their policy will probably not limit their co-pays. This means that even though you may have met your deductible in May, you can still continue to pay copays for each doctors visit in December.

Also, if you are used to a policy that only has copays for certain medical services don’t assume that all policies work the same way. Some policies will make you meet your deductible for prescriptions. Others will pay for prescriptions after you pay a small copay. Others will have both a deductible and a copay on prescription drugs.

Do what you can to understand how any health policy you own works. This means that you should have a good understanding of the following terms:

  • deductible
  • coinsurance
  • copays
  • stop loss or out-of-pocket-maximum

You should also know how each of the above cost shares apply to any policy you own or are considering buying.

It is important to note that having a large copays or deductible are necessarily bad things. What is important is that you are able pay the right price for the coverage you get. If you are not aware of the differences between the cost shares in different policies, you can wind up selecting the wrong plan and paying too much.

Medical insurance copays are an important part of most health insurance policies today. Being aware of how they work and how they can impact your finances is important if you are going to make the right decision regarding your health insurance buying decisions.

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