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Colorado Health Insurance Insider

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What is a Copay?

June 22, 2007 By Jay Norris

First of all, a plan with copays is usually going to be a waste of money. A copay is a dollar amount the health insurance company has specified that you’ll pay for either doctors visits or prescription drugs. A typical plan will have $25 doctors visit copays and $15 copays for generic Rx and $30 copays for brand name Rx, for example. The health insurance company knows that if you’re buying a plan with copays, you plan on using them, and they’ll charge you accordingly. They are a business and need to make a profit.

Most copay health insurance policies in Colorado have a break even point of 2 uses per month. This means that you’ll need to go to the doctor or get your prescriptions filled at least 2 times per month to make the extra premium you’re paying for the copay plan worth it. So the catch is: if you’re healthy enough to qualify for an individual/family health insurance plan in Colorado you probably don’t go to the doctor that often or need that many prescriptions filled. And why would you assume you’re going to start soon?

Another problem with copays is that they don’t count toward your out-of-pocket maximum. So even if you’ve met your deductible and coinsurance, you’ll still have to pay $25 to see the doctor. Why don’t copays count toward your out-of-pocket maximum? Remember… the health insurance company is a business and they would need to charge you more than you would benefit by having that option included.

So what is the moral of the story? If you’re healthy enough to qualify for individual health insurance in Colorado, get a health savings account (HSA) qualified plan. Otherwise, you’re just throwing your money away.

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  • OmniSalud and Colorado Connect: Health Insurance in Colorado

Filed Under: Advice, HSA, Individual/Family Health

About Jay Norris

Jay operates a health insurance brokerage in Colorado, where he helps individuals and small groups obtain and maintain health insurance coverage, provides data analysis, and creates visualizations that are easily understood by consumers and other stakeholders in Colorado’s health insurance market.

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