Applying co-payments to deductibles

[Guest PAFish]

I am interested in knowing if your benefit plans allow applying medical and prescription co-payments to the annual deductible. Thanks!

[Larry M]

It all depends upon what the plan document says.

For many people, the words deductible and copayments seem to be interchangeable. In either case, it defines the amount of out of pocket expense the individual has (in addition to charges which are not covered by a plan).

For an indemnity plan, the common method is to add up the covered medical expenses, subtract the deductible and apply the copayment to the remaining excess.

For example, assume the individual incurs $6,000 of medical expenses, of which $900 is not covered, and the plan has a $100 deductible and an 80% reimbursement (20% copayment).

From the 6,000, subtract the 900 of non-covered expense. From the 5,100 balance, subtract the 100 deductible. The individual's copayment is 20% (or $1,000) and the plan pays 80% (or 4,000).

Some plans treat outpatient prescription drugs as a separate benefit, not subject to the deductible, but with its own copayment - $5 or $10 per prescription or 10% or 20% per prescription.

Some plans compound the confusion by having prescription drugs subject to the deductible but with a separate copayment.

There are other plans where the deductible applies only to certain inpatient medical expenses, or where the deductible varies as to type of medical expense (emergency room care may have a separate deductible or copayment).

When you get into prepaid medical plans (hmo type), there are mixes of deductibles and copayments which vary not only by type of service, but also whether it is in or out of the network.

[Kirk Maldonado]

My experience has been that most plans do not allow the prescription co-pay to apply to the deductible or the OOPs limit.

(I think that is because most of the employers have separate plans for prescription drugs.)

[mroberts]

Copayments are not usually applied to the deductible or out-of-pocket maximums for medical plans.