Co-Pays are Overrated on California PPO Health Plans

Most people focus on the price when they are shopping for health insurance. Price is important but a very important part of the buying decision is weighed upon how much it will cost when it’s time to go to the doctor and exercise the almighty co-pay. This seems to be the most important factor for some people who buy health insurance. Buying a high priced plan with low co-pay and the assumption it will cost you less when you go to the doctor’s office is a big mistake. Very often the higher priced plans will cost you the most when services are needed. So I’ll try my best to help you understand why this is.

I’ve been a California Health Insurance Agent since 1994. And I can’t get over the fact that so many people are so hung up on having a co-pay in order to go to talk to the doctor. They feel that a health plan is no good without one. Co-pays I think are totally overrated. First let me help you understand what a co-pay is. A co-pay, in regards to a doctor’s office visit is the dollar amount you are charged JUST TO TALK TO THE DOCTOR. Let me clarify. Let’s say you have a PPO plan with a $40 co-pay. That $40 lets go into the doctor’s office and covers only the conciliation. Once the doctor stops talking and starts any extra procedure or orders labs or any radiology, you start paying your deductible if you have one or the percentage that you are responsible for.

The amount of premium a policy holder pays in order to have a co-pay can easily be 25% higher than having a policy with no co-pay. Let’s say a 34 year old wants a policy with a co-pay and that policy is $85 a month. And this almighty $85 health plan only lets you see the doctor on a co-pay of $40 3 times per year. If a 34 year old bought health insurance without the co-pay benefits only $69 a month, and that policy covers all the same major medical bills like labs, radiology and hospital stays. It just doesn’t have the co-pay benefit. (Source )

At this point I sure I’ve lost a few readers because math scares them. Or because they feel that having a plan with no co-pay is absurd. Well for those of you still reading you are going to find a little secret. High deductible health plans give you the most bang for the buck. Just do the math. High deductible health plans like HSA qualified health plans cost less per month and have the least amount out of your pocket if there’s a big clam.

The average doctors’ office visit/consultation is about $58. Not far off from a $40 co-pay. And the annual savings on my health insurance policy with no co-pay is huge. What if that 34 year old co-pay type policy holder doesn’t go to the doctor all year? That’s right. You’re paying at least 25% more for something you never used. Kind of like that new treadmill/clothes rack you got at Costco.

Why are people so afraid to pay for a doctor’s visit themselves? I don’t know. Skip the co-pay plans and focus on the deductible and out of pocket max. It’s really no big deal. All it takes to save a huge amount of money is a little smarts.

You’ll thank me later. (Source: Monk)

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