Health Insurance 101: Copay vs. Coinsurance

Find out what it means for you to pay a copay or coinsurance (or the whole bill).

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Your copay and coinsurance are both costs that you pay after you’ve met your deductible for your health insurance plan. What does that mean, exactly?

For starters, you need to understand deductibles. A deductible is the amount that you pay for medical expenses before your insurance kicks in. Plans offer a wide range of deductibles. You can get a $200 deductible plan, for example, and then you’d only pay $200 in out-of-pocket costs before your insurance benefits became available. On the other hand, you could have a high-deductible plan where you might need to pay $6,000 in expenses before insurance kicks in. Learn more about what a deductible is here.

Either way, before you reach the deductible, you may need to pay full price for some services. Once you reach the deductible stated on your insurance plan, you usually only need to pay a copay or coinsurance. So what’s the difference?

Copay vs. Coinsurance for Health Insurance

What Is a Copay?

A copay is a set fee that you pay for health services or supplies after you’ve met your deductible. Your plan will usually list the copays for different categories of services. For example, blood work and doctor visits may have a designated copay (like $20). Learn more about what a copay is here.

For specific services, your plan may only charge a copay whether you’ve met your deductible or not. For example, many plans charge a small or no copay for preventative or basic services like annual checkups or urgent care visits. This can help you catch health issues early or prevent illnesses altogether. Again, you can find this information on the brochure for your specific plan.

What Is a Coinsurance?

A coinsurance is a set percentage of costs that you pay for health services or supplies. For example, you may pay 20 percent of the total surgery cost, and your insurance company would pay the rest. That means you might not know how much you’ll need to pay until the provider states the final price.

How Do You Know Which You’ll Pay?

Your insurance plan should clearly state whether you pay a copay or coinsurance for a particular service. In general, you pay copays for prescriptions, doctor visits, and urgent care visits. On the other hand, you might pay coinsurances for surgeries, x-rays, and hospital stays.

If you don’t see the service on your insurance brochure, or if you’re just not sure which category it fits in, don’t guess. Call your insurance representative before a healthcare visit or service. Surprise costs are never fun, and the insurance rep can go over your plan with you and help you figure out what to expect.