Coinsurance: Percentage of the total cost for care.
Copay: Fixed amount, or flat fee, for receiving care.
Coinsurance versus Copays… (and Deductibles)
Copays, coinsurance, and deductibles are all considered cost sharing, a term used to describe situations where both you and your health insurance company pay part of your medical expenses. You know what coinsurance and copays are, so what’s a deductible?
A deductible is the amount of money you pay for a doctor’s visit or health care service before your insurance company begins to contribute. For instance, if you have a $1,000 deductible, you will be responsible for all health care charges until those charges reach $1,000. Once your $1,000 deductible is met, you will share the cost of your health care services with your insurance company by paying coinsurance and/or copays.
Note: copays do not count towards your deductible, but do count towards your out-of-pocket maximum.
An out-of-pocket maximum is the most you will be responsible to pay for doctor’s visits and medical procedures in any given year.
Coinsurance vs. Copay: The Difference Is in the Details
A copay is the amount that you pay when you go to the doctor. Copays can vary by health insurance policy and can change if you see a specialist, go to the ER, or seek treatment outside of your health insurance provider’s network.
A network is a group of health care providers, including hospitals and doctors, who work for pre-negotiated rates, resulting in significant savings for you if you stick to a physician or hospital that is in the network.
Even after meeting your deductible, your copay may be too small to cover all of your health care expenses. This is when coinsurance will play an important role in reducing your out-of-pocket costs.
As mentioned before, coinsurance is the percentage of your total health care costs that you pay. Let’s take a look at another example: If you are seriously injured and incur a $2,000 medical bill with a 30% coinsurance, you will be responsible for 30% of the $2,000 ($600), and your insurance company will pay the remaining 70% ($1,400).
Still confused about these health insurance terms? HealthMarkets can help you build a solid understanding to choose the best affordable health care policy for you and your family. Contact a licensed representative today.