Health insurance policies help cover the cost of prescriptions, but most people still have a copay. Do you know how your prescription copay works?
Having health insurance coverage that includes prescription drugs helps make your medications more affordable, but it’s important to keep copays in mind. Copays are the dollar amounts that your health insurance company charges when you pick up your prescriptions. If you don’t know how prescription copays work, you need to closely examine your insurance policy to understand your fees, including how your copays are determined and what you can expect to pay when you pick up your medications at your local pharmacy.
Copay vs Coinsurance: What’s the Difference?
Both copays and coinsurance refer to certain costs associated with prescription drug coverage on certain health insurance policies, but they are not the same. Copays are the dollar amounts charged by your health insurance company for each prescription transaction, and they are communicated electronically to your pharmacy when your prescription is filled. Coinsurance refers to a percentage of the cost of prescription drugs that you pay after you reach your deductible. Just as if you were paying for a doctor’s visit or surgery, paying for a prescription is like making an insurance claim. Whatever fees you owe to your health insurance provider are dictated according to each “claim” in the form of a copay.
Copays and coinsurance can vary based on different factors, such as the type of health insurance you have, whether you use brand name or generic drugs, and whether you use a local independent pharmacy or a big box store pharmacy. Some stores will even tack on an additional fee for prescriptions on top of your copay, but Smith-Caldwell does not!
If you’re not sure whether you pay a copay or coinsurance for your prescriptions, contact your insurance provider.
How Do Prescription Copays Work?
The amount that you can expect to be charged for your prescription drugs depends on what kind of insurance coverage you have. Different types of coverage for medications include the following:
- Before deductible: If you have prescription drug coverage that kicks in before you reach your deductible, you can expect to pay copays or coinsurance. It’s important to look over your policy to see how much you’ll be charged for the medications you need, as not all copays are the same. Keep in mind that some prescription drugs might not be covered under your plan, which means you’ll be paying more for them.
- After deductible: With this kind of coverage, you aren’t charged any copays until after you reach your deductible. Before this happens, you’ll have to pay more out-of-pocket for your prescriptions. After reaching your deductible, your health insurance company should start covering some of the cost of your prescriptions and charging you copays.
- Special deductibles: If you have a plan that has a special deductible for prescriptions only, you will need to meet those deductibles before coverage for your medications kick in. These plans usually include separate deductibles for prescriptions and general healthcare services.
How Copays Work by Prescription Drug Category
Some health insurance plans have drug coverage tiers, which helps determine how much your copays will be. Tier 1 medications typically include generic drugs, which usually have the lowest copays. Tier 2 might have certain brand name drugs that your health insurance company prefers, while tier 3 might have non-preferred brand name prescriptions. Tier 4 might have specialty medications, which are usually the most expensive.
Tier 4 medications, which are generally used for rare conditions or serious ones, tend to cost more than prescriptions from other tiers. If your plan uses drug coverage tiers, look it over carefully to understand which drugs are included in each tier. This can help you know what to expect in terms of how much you’ll need to pay out-of-pocket and in copays for your prescriptions.
If you need a prescription filled or if you have questions about how your prescription copay works, please contact the pharmacy at Smith-Caldwell Drug Store in Benton, Arkansas by calling 501-315-7700.