Copay vs Coinsurance

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It's great to have health insurance. However, health insurance terms can be confusing. Two of the most common and most important terms you need to know for health insurance are copay and coinsurance. These two concepts have some similarities, but also have some key differences. This article will help you understand the two options. Use this information to make the best decision about health insurance to fit your needs and your budget.

What Is Coinsurance?

Simply put, coinsurance is the percentage of the costs for health care services that you pay after you meet your deductible. An example will help demonstrate what this means. If your health plan allows $100 for a doctor visit and you have a 20% coinsurance, then you’ll pay $20 if you’ve already met your deductible. If you haven’t met your deductible for the year, then you’ll pay the full $100.

Understanding Deductibles

Deductibles are the key to understanding coinsurance. Your deductible is the amount of money you pay out of pocket before your insurance covers the rest of the costs. Almost every insurance product has some kind of deductible.

Some plans have a higher deductible and others have a low deductible. Plans with a high deductible are usually cheaper month to month. Insurance with a low deductible generally have a more expensive monthly premium. That means you can use the information you know about your health care needs to pick a plan that’s right for you.

What is A Co-Pay?

A copay is the money that you pay to see a doctor regardless of your deductible status. This will be a fixed, flat rate for different types of healthcare services.

For example, if you have a copay of $20, then it doesn’t matter what your doctor charges for an appointment, you’ll only pay $20. As a result, this results in more predictable health care costs for people that use healthcare services frequently.

Similarities and Differences for Coinsurance and Copays

Copays and Coinsurance are similar in some ways, but are different in other, very important ways. This section lists those similarities and differences. Once you understand those, you can make a choice as to which one is best for your healthcare needs.


Coinsurance and copays are similar in that:

  • They’re both an amount you pay out of pocket

  • Both reduce medical costs

  • Apply to all medical services, including doctors, prescriptions, specialists, hospitals, and emergency rooms

As you can see, copays and coinsurance both reduce the amount of money you pay out of pocket for health care. Also, a copay and coinsurance come out of your pocket, not your insurance company. They also are both used for all healthcare services. That means an insurance plan with either a copay or coinsurance will save you money on healthcare while ensuring you get the coverage you need.


  • Out of pocket expenses

  • Deductible tracking

  • Monthly premiums

The main difference between a copay and coinsurance is how out of pocket expenses work. With a copayment, you pay a flat rate. If you have a coinsurance, then the amount you pay will change based on whether or not you’ve met your deducible.

That leads to the second important aspect. Copayment plans don’t require you to pay as much attention to your deductible. That’s because the flat rate you pay for covered services will be the same regardless of how much money you’ve spent out of pocket on health care.

In the same way, a coinsurance payment will generally have higher out of pocket expenses, especially at first. That’s because you pay the full price for services until you’ve met your deductible. Moreover, that means you’ll need to keep track of your deductible much more closely.

However, because you need to meet your deductible to get coverage, the monthly premium on coinsurance plans is usually lower than it is for copayment plans. These similarities and differences are important to know if you want to understand which option is best for you.

Understanding Copays and Coinsurance

This section will give you some tips to understand which option, coinsurance or copayment, is best for your health care plan.

Coinsurance Might Be Better If....

  • You rarely require medical services/don’t go to the doctor often

  • You have few or no prescription medications

  • You want a lower premium

  • You don’t mind paying a higher amount for services upfront before you reach your deductible

Copays Might Be Better If....

  • You make regular visits to the doctor

  • You have regular prescription medications

  • You don’t mind paying a higher monthly premium

  • You don’t want to keep track of a deductible

  • You want to pay a flat rate for medical services

Use this information along with your own medical needs to make an informed decision about what health insurance best fits your needs. Your health matters. That means getting the right insurance is essential to living your best life.