Do You Pay Copays With Medicare? A Breakdown of Cost Sharing

Copays, along with premiums, deductibles, and coinsurance, make up the “cost sharing” aspects of Medicare. These out-of-pocket costs help fund Medicare and prevent overutilization of health services.

But Medicare’s cost sharing structure can be confusing. Do you pay copays under Original Medicare or is it only with Medicare Advantage plans? And what’s the difference between a copay and coinsurance anyway?

This article will explain when you are responsible for copays with Medicare and provide examples of typical copay amounts. Let’s break down everything you need to know about Medicare copayments.

What is a Copay?

First, a quick refresher on what a copay is. A copay is a fixed dollar amount you pay when receiving a specific medical service or prescription drug.

For example, your plan may charge a $20 copay to see a primary care doctor or a $35 copay for a brand-name prescription. The copay is paid per service.

Copays are different from coinsurance, which is a percentage of costs you pay (like 20%). They are also different from the deductible, which is a set dollar amount you pay first before coverage kicks in.

• Copay: Set fee per service (e.g. $20 doctor visit copay)

• Coinsurance: Percentage of costs (e.g. 20% of a hospital stay)

• Deductible: Fixed dollar amount to pay first before coverage starts

Now let’s look at how copays work with different parts of Medicare.

Do You Pay Copays With Original Medicare?

No, there are no copays under Original Medicare, which includes Part A (hospital insurance) and Part B (medical insurance).

Instead, you pay the following cost sharing amounts:

Part A Cost Sharing

• Yearly deductible for each benefit period
• Per-day coinsurance for extended hospital and nursing facility stays
• Limited coinsurance for some services like durable medical equipment

Part B Cost Sharing

• Annual deductible
• 20% coinsurance for most doctor and outpatient services after meeting deductible
• No coinsurance for some services like lab tests

But while there are no copays for Part A or Part B, you may pay copays under “Part C” and “Part D”:

Medicare Advantage Plan (Part C) Copays

Medicare Advantage plans are offered by private insurers as an alternative to Original Medicare. These plans, also called Part C, provide all the coverage of Part A and Part B but can include extra benefits like vision or dental care.

Unlike Original Medicare, Medicare Advantage plans can charge copayments like a typical health insurance plan. Copays apply to things like:

• Doctor office visits (e.g. $10 PCP copay)

• Specialist visits (e.g. $50 copay)

• Hospital outpatient services (e.g. $250 ER copay)

• Prescription drugs (e.g. $8 generic copay)

The services subject to copays will vary by Medicare Advantage plan, as will the copay amounts. But they provide predictability by putting a fixed dollar limit on what you’ll owe.

Medicare Advantage plans typically charge lower copays when you get care within their provider network. Using out-of-network providers means paying more of the cost yourself.

Medicare Part D Prescription Drug Copays

Part D adds prescription drug coverage to Original Medicare. It’s mainly provided through private Medicare-approved plans you purchase.

Similar to Advantage plans, Part D plans use copays or coinsurance (or both) for covered medications. The amount varies based on the:

• Drug tier (generic, preferred brand, etc.)
• Plan’s formulary
• Pharmacy’s preferred status

For example, you may pay a $3 copay for a generic or a $47 copay for a non-preferred brand drug at an in-network pharmacy.

Part D copays apply per prescription fill. Your costs each month will depend on what medications you need.

Typical Medicare Copay Amounts

Copays under Medicare Advantage and Part D plans span a wide range based on many factors. But here are some general ballpark copay amounts for common services:

• Primary care visit – $0 to $30

• Specialist visit – $35 to $75

• Urgent care – $40 to $65

• Emergency room – $75 to $250

• Inpatient hospital stay per day – $200 to $400

• Generic prescription – $0 to $15

• Preferred brand prescription – $25 to $50

• Non-preferred brand prescription – $50 to $100+

Copays for hospital services are usually the highest given the higher cost of facility fees. Drug copays get more expensive as you move to non-preferred and specialty tier medications.

Again, specific copay amounts depend on many elements like location, plan benefits, and drug tiers. But these ranges give a rough idea of typical copay costs.

What About Medigap and Medicare Copays?

Medigap is supplemental insurance that helps pay costs in Original Medicare like deductibles and coinsurance. But Medigap generally does not cover copays since those are not charged under Part A and Part B.

However, Medigap Plan N does provide limited copay coverage:

• It covers up to $20 of your Medicare Part B coinsurance
• It pays the Part B excess charges copay (which is rare)

So in general, Medigap is not designed for copay coverage beyond these specific scenarios. You would need to rely on MA or Part D plan benefits to cover associated copays.

Are There Limits on Medicare Copay Costs?

There is no annual limit to what you might pay in total copays under Original Medicare Part A and Part B. Your costs depend on the services utilized.

But Medicare Advantage and Part D plans must cap total copays each year through the out-of-pocket maximum. In 2023, the limits are:

• Medicare Advantage: $8,300 out-of-pocket max

• Part D standard benefit: $7,400 out-of-pocket threshold

Once your total copays and other cost sharing reaches this level, you pay nothing for the rest of the year. This provides financial protection compared to Original Medicare.

Can You Get Help Paying Medicare Copays?

Yes, if you have limited income and assets, there are two programs to get assistance with Medicare copays and other out-of-pocket costs:

• Medicare Savings Programs: Help pay Part A/Part B premiums, deductibles, coinsurance.

• Extra Help: Lowers Part D prescription copays and premiums.

You can qualify for both programs at the same time if you meet the eligibility criteria. This helps take a chunk out of copay expenses each year.

Do Medicare Copays Make Sense for You?

While unpredictable, copays under Medicare Advantage and Part D provide more cost certainty than coinsurance for budgeting. And they help protect against unexpectedly high medical bills.

But weigh the tradeoffs – Medicare plans with higher copays tend to have lower premiums upfront. Those with lower copays charge more in monthly premiums.

Analyze your expected healthcare needs and finances to find the optimal balance of premiums and copays under Medicare.