Coinsurance vs. Copay — What's the Difference?
By Tayyaba Rehman & Maham Liaqat — Updated on May 15, 2024
Coinsurance is a percentage of medical costs you pay after meeting your deductible, while a copay is a fixed amount you pay for specific healthcare services at the time of service.
Difference Between Coinsurance and Copay
Table of Contents
ADVERTISEMENT
Key Differences
Coinsurance is a cost-sharing arrangement in health insurance where you pay a percentage of the medical expenses after meeting your deductible. A copay, on the other hand, is a fixed fee you pay for specific healthcare services, regardless of the total cost of the service. Copays are predetermined amounts set by your insurance plan for services like doctor visits, prescriptions, or emergency room visits.
While coinsurance typically comes into play after you have met your annual deductible, copays are usually required immediately at the time of service and may apply before reaching the deductible. This means you might have to pay a copay even if you haven't yet met your deductible for the year.
Coinsurance can lead to varying out-of-pocket costs depending on the total expense of the medical services received. In contrast, copays provide a predictable cost structure for specific services, making it easier to budget for routine healthcare expenses.
Insurance plans often include both coinsurance and copays, and understanding how each works is crucial for managing healthcare costs. For example, you might have a plan with a $500 deductible, 20% coinsurance, and $25 copays for doctor visits. Once you've paid $500 in medical expenses, you then pay 20% of additional costs, and continue to pay $25 for each doctor visit.
Coinsurance and copays also contribute to your out-of-pocket maximum, which is the most you will pay in a year before your insurance covers 100% of your costs. Balancing both components can help you better navigate your healthcare expenses.
ADVERTISEMENT
Comparison Chart
Cost Structure
Percentage of medical expenses
Fixed amount per service
Applicability
After deductible is met
At the time of service
Variability
Varies with total service cost
Fixed, predictable amounts
Example
20% of a hospital bill
$30 for a doctor visit
Contribution to Max
Counts towards out-of-pocket maximum
Counts towards out-of-pocket maximum
Compare with Definitions
Coinsurance
Applies to various services, impacting out-of-pocket expenses.
Your coinsurance for surgery might be 30%.
Copay
Fixed amount paid for specific healthcare services.
A $25 copay for each doctor visit.
Coinsurance
Percentage rate varies by insurance plan.
Some plans might have 10%, 20%, or 30% coinsurance rates.
Copay
Different copays for various services within a plan.
$50 copay for emergency room visits, $20 for specialists.
Coinsurance
A percentage of healthcare costs you pay after meeting your deductible.
With 20% coinsurance, you pay $200 of a $1,000 medical bill.
Copay
Paid at the time of service, regardless of total service cost.
You pay a $10 copay for prescription medication.
Coinsurance
Cost-sharing mechanism between you and your insurer.
After paying the deductible, you cover 20% of additional costs.
Copay
Helps predict and manage routine healthcare costs.
Knowing your copay can help budget for regular visits.
Coinsurance
Contributes to out-of-pocket maximum limits.
Once you reach your out-of-pocket maximum, the insurance pays 100%.
Copay
May apply before meeting the deductible.
Even if you haven't met your deductible, you still pay the copay.
Coinsurance
Insurance held jointly by two or more insurers.
Copay
A copayment.
Coinsurance
A form of insurance in which a person insures property for less than its full value and agrees to be responsible for the difference.
Copay
To jointly pay with another or others.
Coinsurance
A sum of money paid by a patient to a health care provider after a health insurance company has paid a contractual amount for a covered service, usually a fixed percentage of costs. Coinsurance usually applies after an annual deductible has been paid.
Copay
A copayment.
Coinsurance
(US) The joint assumption of risk between the insurer and the insured party.
Coinsurance
(international) The joint assumption of risk between multiple insurers.
Coinsurance
Insurance jointly with another or others; specif., that system of fire insurance in which the insurer is treated as insuring himself to the extent of that part of the risk not covered by his policy, so that any loss is apportioned between him and the insurance company on the principle of average, as in marine insurance or between other insurers.
Coinsurance
Insurance issued jointly by two or more underwriters
Common Curiosities
What is a copay?
A copay is a fixed amount you pay for specific healthcare services at the time of service.
How does coinsurance affect out-of-pocket costs?
Coinsurance varies with the cost of services, affecting total out-of-pocket expenses.
When does a copay apply?
A copay applies at the time of the service, such as a doctor visit or prescription.
When does coinsurance apply?
Coinsurance applies after you have met your annual deductible.
How does a copay affect out-of-pocket costs?
Copays provide predictable, fixed costs for specific services.
Can you have both coinsurance and copays in a health plan?
Yes, many health plans include both coinsurance and copays.
Do both coinsurance and copays count towards the out-of-pocket maximum?
Yes, both contribute to your out-of-pocket maximum.
What is a typical coinsurance percentage?
Common coinsurance rates are 10%, 20%, or 30%, depending on the plan.
What is coinsurance?
Coinsurance is a percentage of medical costs you pay after meeting your deductible.
Do copays apply before meeting the deductible?
Yes, copays often apply before reaching the deductible.
Is coinsurance calculated before or after the deductible?
Coinsurance is calculated after the deductible is met.
What are typical copay amounts?
Copays can range from $10 to $50 or more, depending on the service and plan.
How can I know my copay amounts?
Copay amounts are specified in your insurance plan’s summary of benefits.
What happens when I reach my out-of-pocket maximum?
Once you reach your out-of-pocket maximum, your insurance covers 100% of covered expenses.
How can I know my coinsurance rate?
Your coinsurance rate is detailed in your insurance plan documents.
Share Your Discovery
Previous Comparison
Summary vs. Conclusion
Next Comparison
Flip vs. ReverseAuthor Spotlight
Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
Co-written by
Maham Liaqat
