Understanding your health insurance costs can be confusing, especially when you start trying to navigate terms like “copays” and “coinsurance”. Although both of these determine how much you pay for medical care, they both work in different ways.
With a copay, you pay a set fee when you receive a particular type of medical care. Your plan could charge one amount for an appointment with your regular doctor and a higher amount for a specialist visit. The amount typically stays the same every time you receive that service, although your plan may have different copays for different types of care.
Coinsurance works differently because your share is calculated as a percentage of the approved cost. It generally applies once you have satisfied your deductible. For example, if your plan has 20% coinsurance and an eligible medical service costs $1,000, you would have to pay $200 for that service and your insurance would cover the rest.
One important difference between copays and coinsurance is that copays are typically predictable, while coinsurance can vary depending on the cost of the service. Your deductible, network, and out-of-pocket maximum can also impact what you pay in the end.
As you evaluate health insurance options, look beyond the amount charged for monthly premium. Instead, take into account coinsurance, deductibles, and out-of-pocket limits together to gain a better understand of what your total healthcare expenses could be.