Typically an insurance policy will have a deductible, coinsurance or copayment, and an out-of-pocket maximum. Although every insurance plan is different and may not have each of these, it’s important to understand them and how they work, like the difference between a copay and coinsurance. It’s especially useful when it comes time to choose future health care plans.
Copays
A copayment (also referred to as a copay) is a nice, round dollar amount you pay for health care services after you’ve paid your deductible.
- For example, Dwayne’s health insurance plan’s cost for a doctor’s visit is $100. His particular plan has a copayment charge of $15 for office visits.
- If Dwayne has already met his deductible, then he will only be responsible for paying $15 at the time of service.
- If he hasn’t met his deductible, however, he will pay $100, the full allowable amount for the visit.
For the most part, all insurance plans have some sort of copay for one service or another. Copayment amounts can vary for different services. You may have a $30 copay for specialist visits yet have a $50 copay for lab tests. Some services may not require a copay at all.
Coinsurance
A coinsurance is a percentage of the costs for health care services you are responsible for paying after you’ve met your deductible.
- For example, if the health insurance plan’s allowed amount for an office visit is $100, and Dwayne has met his deductible already, his 20% coinsurance payment would end up being $20 (20% of $100).
- The health insurance company will then pay the rest of the allowed amount ($80).
Coinsurance amounts can be different depending on the type of service. You may have a 10% coinsurance for chiropractic visits yet have a 20% coinsurance for exam visits. Some services may not require a coinsurance at all.
Using your newly found knowledge about health insurance will help you pick the right plan for you. For more information regarding insurance benefits, click here.
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