Coinsurance vs. Copays: What Are the Differences?
Coinsurance and copays are both ways that you split medical bills with your health insurance company.
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Copay vs. coinsurance
Copays are flat fees that you pay when you get certain types of health care. With coinsurance, you pay a percentage of your total medical care bill.
Your health insurance plan probably has both copays and coinsurance, depending on the type of health care services you receive and how much you've already paid toward your medical bills.
For example, you might pay a $30 copay on the day you go see a primary care doctor. Once the final bill comes in the mail, you might pay 20% or 30% of it, assuming you've already met your deductible.
Copay
- Flat fee
- Paid at your appointment
- Can apply before and after your deductible
- Doesn't count toward your deductible
Coinsurance
- Percentage of your medical bill
- Paid when you get your bill
- Only starts after you hit your deductible
- Doesn't count toward your deductible
Copay vs. coinsurance vs. deductible
Copays, coinsurance and deductibles are all ways that you and your health insurance company split the cost of your medical care. This is called "cost sharing."
- Deductible: The amount you have to pay before your health insurance starts paying your medical bills
- Coinsurance: The percentage of your medical bills you pay after you reach your deductible
- Copay: A flat fee you pay when you go to the doctor or get certain types of medical care
Each cost-sharing method kicks in at a different time.
Your deductible comes first, although you often have copays even before you hit your deductible. After you've paid your full deductible each year, you'll pay a percentage of your medical bills, called coinsurance. Sometimes you'll have a copay even after you hit your deductible.
Once you've paid a certain amount of money for your medical bills — known as your out-of-pocket maximum — you won't have to pay a copay or coinsurance anymore. When you hit the out-of-pocket maximum for your plan, your health insurance starts paying for the full cost of covered medical bills.
What is coinsurance?
Coinsurance is the percentage of your medical bills that you pay after you hit your deductible.
Coinsurance is shown as two numbers, such as 80/20 or 70/30. Your insurance company pays the percentage shown in the first number, and you’ll pay the percentage in the second number.
Coinsurance example
Let's say you have health insurance that has 80/20 coinsurance and a $2,000 deductible.
You break your arm and go to the ER, and you get a bill for $5,000. You have to pay the first $2,000 — your deductible — and then you split the remaining $3,000 with your insurance company. Because you have 80/20 coinsurance, your plan pays 80% of the $3,000 bill, ($2,400) and you pay 20% ($600).
You pay | Insurance pays | |
|---|---|---|
| Deductible | $2,000 | $0 |
| Coinsurance | $600 | $2,400 |
| Total | $2,600 | $2,400 |
Your health insurance plan might have different levels of coinsurance for different types of health care. You might pay 20% of your medical bills when you see a specialist doctor, for example, but 35% when you fill a prescription.
Whether or not you pay coinsurance also depends on the type of health plan you have and where you get your health care. With an HMO, for example, you don't have any coverage if you go to an out-of-network doctor. That means you'll have to pay the entire bill yourself instead of a coinsurance percentage.
But with a PPO, you have coverage for both in- and out-of-network doctors. That means you'll pay your coinsurance percentage instead of the full bill no matter where you get care — provided you’ve already met your deduction.
And sometimes, you don't have to pay any coinsurance. Most plans don't charge you anything for certain types of medical care, such as vaccines and blood pressure screenings.
What is a copay?
A copay is a flat fee, like $20 or $50, that you pay on the day you receive medical care.
The amount you pay depends on your plan and the type of medical care you need. You might only pay $25 for a routine visit to the doctor, for example, but $80 if you need to see a specialist.
You might not always have to pay a copay. For example, most plans don't charge a copay for preventive care, such as your annual wellness checkup, vaccines and some cancer screenings.
Unlike with coinsurance, you'll usually pay copays both before and after you reach your deductible. That's because copays don't usually count toward your deductible. However, they do count toward your out-of-pocket maximum — so once you hit that amount, you won't pay any copays (or anything at all) for covered medical care.
Copay example
Say you have a health insurance plan with $20 copays for doctor visits. If you get sick and visit your primary care doctor, you'll pay $20 at the front desk before you leave.
Now let's say you have a $50 copay for emergency room visits, a $2,000 deductible and 80/20 coinsurance. If you fall off a ladder while cleaning your gutters and go to the ER, you'll pay a $50 copay at the front desk before leaving the hospital.
Later, when you get the full $5,000 bill in the mail, you'll pay your $2,000 deductible (remember, your $50 copay doesn't count toward your deductible). You'll also pay $600 in coinsurance.
You pay | Insurance pays | |
|---|---|---|
| Copay | $50 | $0 |
| Deductible | $2,000 | $0 |
| Coinsurance | $600 | $2,400 |
| Total | $2,650 | $2,400 |
How to choose copays and coinsurance amounts
Look for health insurance plans that have copays and coinsurance levels you can reasonably pay.
You can't actually pick your exact copay and coinsurance levels, but you can choose a plan that has levels you can afford. If you don't have much in savings, look for a plan that has lower amounts for copays and coinsurance, so you pay less for medical care. If you can afford higher copays and coinsurance, you might get a cheaper monthly rate.
The best way to find a plan that works for you is to compare health insurance plans from different companies. That way, you can find a plan that fits your monthly budget and has copays and coinsurance levels that work for your finances.
Frequently asked questions
Is it better to pay a copay or coinsurance?
Most health insurance policies have both copays and coinsurance, so you don't usually have the option to pick just one or the other. Copays are usually cheaper than coinsurance since they're flat fees, like $20 or $50. Coinsurance is a percentage of your total medical bill. The more expensive your medical care, the more you'll pay.
What does 30% coinsurance mean?
If your plan has 30% coinsurance, that means you have to pay for 30% of your medical bills after you reach your deductible. So if you have a $2,000 deductible, you have to pay the first $2,000 of your medical bills. After that, you split the bills with your insurance company and you pay 30%. For a $1,000 medical bill, that means you pay $300.
Does 80% coinsurance mean I pay 80%?
No, 80% coinsurance means you pay 20% of your medical bills — the insurance company will pay the remaining 80%. Coinsurance is usually listed as two percentages, like 80/20 or 70/30. Your insurer pays the higher percentage, which is always the first number, and you pay the second, lower percentage.
Sources
Sources for this article include HealthCare.gov and data from the Centers for Medicare & Medicaid Services for marketplace health insurance plans.
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