Coinsurance vs Copay — Every Difference Explained

So your insurance requires a $20 copay with a 20% coinsurance. But what does that mean exactly? Is there a difference between coinsurance vs copay? Are they the same? We’ve discovered everything you need to know to help you choose the cheapest health insurance for you and your family.

If you’re looking for more affordable health insurance, Health Care Plan Quotes agents are experts at navigating the ACA Marketplace. Call us at (855) 968-5736 or use our quoting tool for free to see the coverage options available.

Here’s how you can determine the difference between coinsurance and copayments:

What is Coinsurance?

Coinsurance is a percentage of healthcare services you must pay after you meet your deductible. Your coinsurance will be indicated as a ratio when you sign up for your health insurance. For example, if your coinsurance is 80/20, your insurance provider will pay 80% of the medical service, and you must pay for the remaining 20%.

Typically, coinsurance is used for medical service coverage and will only activate after you pay your deductible. Different plans have different coinsurance amounts, and because costs are based on percentages, the medical payment will depend on where you live. You’re more likely to have lower coinsurance costs if you pay a higher monthly premium.

Likewise, HMO & PPO plans also have different coinsurance amounts. An average HMO will have a lower coinsurance cost while PPOs have higher coinsurance rates.

What Does Coinsurance Look Like in the ACA Marketplace?

The ACA Marketplace typically has four different levels of coverage ranging from Bronze Plans to Platinum Plans. Here’s what your coinsurance rates can look like under the Federal Marketplace:

Bronze Plans cover 60% of your health expenses
Silver Plans cover 70% of your health expenses
Gold Plans cover 80% of your health expenses
Platinum Plans cover 90% of your health expenses

What is Copay?

Copayments are fixed payments for healthcare services such as office visits and prescription drugs. For example, if your copay is $20 on a doctor’s visit, you must pay $20 after services have been rendered and your health insurance will cover the remaining amount. Typically, you will start paying your copay once you meet your deductible. However, there are health insurance plans that allow you to pay your copay before meeting your deductible amount.

Your copayment can differ depending on the type of care you receive, the prescription you pick, or if you choose an out-of-network provider. Plus, HMO plans typically have higher copayments compared to PPO plans.

According to the Kaiser Family Foundation (KFF), an average copayment is $26 and $44 for specialty visits.

What Do Copayments Look Like in the ACA Marketplace?

Copayments under the ACA Marketplace will depend on the plan that you choose. However preventive care is fully covered with ACA-compliant plans, so you will not pay copayments on those visits.

Coinsurance, Copays, and Deductibles

Deductibles are the healthcare services you must pay for before your copays and coinsurance kick in to help with health coverage. The average deductible cost through a Federal Marketplace plan is $5,452, which means you’ll need to spend $5,452 before you can get the full benefits of your health insurance.

Some plans on the ACA Marketplace will have separate deductible amounts for prescription drugs and preventive benefits are fully covered and exempt from payment.

Coinsurance vs Copay

While coinsurance and copays are very similar, they have distinct differences that make them unique, and depending on the circumstances, you can find yourself paying both, one, or none of these costs.

Do you need a new plan with cheaper coinsurance and copay costs? Call us at (855) 968-5736, and we’ll help point you in the right direction and show you the most affordable plans with the most coverage.

Here’s what you should know about these health insurance terms:

Coinsurance vs Copay Similarities

Used to pay for healthcare coverage
Both copays and coinsurances are used to cover healthcare costs. Your health insurance provider covers the remaining costs once you pay for your service and the claim is approved.

You can use your HSA money to cover both copays and coinsurance
If you have an HSA plan through your workplace or a high-deductible health plan, you can use those funds to pay for copays and coinsurance.
Once you hit your out-of-pocket maximums, you won’t have to pay for coinsurance or copays (depending on your plan)
An out-of-pocket maximum is the maximum amount of money you can pay toward healthcare services before your health insurance provider covers all costs. Every payment you make on copays and coinsurance will go towards fulfilling your out-of-pocket expenses.

Coinsurance vs Copay Differences

Coinsurance works off percentages and copay is a fixed amount
Calculating coinsurance payments is based on percentages, so you must calculate how much you pay for your service. Copays are always a fixed amount indicated after you sign up for your health insurance plan.

Copays are used for certain office visits, prescription drugs, and therapy. Coinsurance is used for medical services.
This is a bit trickier to explain since each insurance classifies when to use coinsurance and copayments differently. Generally, coinsurance is only used to pay for pricier procedures of specialized treatment while copays cover general services like office visits and prescription drugs.

Coinsurance only applies once you’ve hit your deductible; copays can apply before and after you’ve fulfilled your deductible amount.
Before you hit your deductible amount, you are responsible for all the medical coverage you might incur. However, once your deductible is fulfilled, coinsurance will kick in to cover the remaining balance. Copays apply before and after deductible fulfillment. However, that depends on your plan.

Coinsurance and Copayment Example

Consider that you have fulfilled your deductible on your healthcare plan, and your copay amount is $20 with a $40 specialty charge with an 80/20 coinsurance ratio. Here is a scenario that you could encounter:

- You go to your primary care physician, and they suggest that you go to a specialist: a $20 charge
- Your primary care physician suggests that you see a specialist for a specific issue you encounter: a $40 charge
- Your specialist recommends surgery that costs $2,000 in total. You get the procedure done and pay the coinsurance amount: a $400 charge

Your total charge for services done is $460

This is a hypothetical scenario, and all numbers and situations have been fabricated. For accurate plan information, call one of our talented agents at (855) 968-5736 or use our free quoting tool to get specific coinsurance and copayment prices.

Conclusion

Coinsurance and copayments are difficult to navigate if you don’t know the difference, and you can get confused with payments depending on your situation. Hopefully, you have a better understanding of your coverage and how much you’ll be expected to pay for each service.

For a more comprehensive understanding, call us at (855) 968-5736 to speak with an expert. Or you can use our unique health plan tool for free to see what plans are available.