What is a Copay, Deductible, and Coinsurance

It is not clear exactly what your health insurance plan covers. So understanding the terms is important to knowing and using your benefits.

The terms below are forms of “cost-sharing”. The member and the insurance company pay for the medical services.

What is a Copay?

A copayment, or copay, is a fixed amount for a covered service. The patient pays the copay to the provider of service before (or sometimes after) receiving the service. The amount of the copay usually depends on the type of healthcare service.

Example of a Copay

It is a fixed amount a person pays for services. For example, a member may have a $25 copay for an office visit with a primary care physician and a $40 copay for a specialist. All copays are fixed and detailed in the summary of benefits at the beginning of the plan.

What is a Deductible?

The amount members pay for covered services before insurance coverage begins cost sharing. After a member meets his or her deductible, he or she you may pay only a copayment or coinsurance for covered services. Or the person may not need your insurance company pay the rest. plans with lower monthly premiums have higher deductibles. Plans with higher monthly premiums usually have lower deductibles.

Example of a deductible

For example, if you have a $2,000 deductible, you will pay 100 percent of all eligible expenses until the bills total $2,000. Once the deductible is paid, you will owe only any copays or remaining coinsurance for covered services.

See Also: an article on embedded vs non-embedded deductibles.

What is Coinsurance?

Coinsurance is paid after a person has met his or her deductible. It is a percentage of the allowed amount for services.

Example of Coinsurance

For example, your coinsurance is 20% on your plan and the allowed amount for lab work is $100. If you have paid your deductible, you will owe 20% of the allowed amount of $100, or $20. If you have not paid your deductible, you owe the full amount of $100. Not all plans have coinsurance.

It’s important to be sure you understand your benefits when you receive your plan documents. All health insurance plans come with a summary of benefits, which includes information on all copays, deductible and/or coinsurance. If you have additional questions about your plan, it’s best to contact the health insurance company directly.

You may always find contact information on your member ID card.

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