How do Deductibles, Coinsurance and Copays Work?
You and your health insurance company pay for your health care expenses. Deductibles, coinsurance and copays are all examples of what you pay. Understanding how each example works helps you know how much you pay.
What is a Deductible?
A deductible is the amount you pay for health care services before your health insurance begins to pay.
How it works: If your plan’s deductible is $1,500, you’ll pay 100 percent of eligible health care expenses until the bills total $1,500. After that, you share the cost with your plan by paying coinsurance.
What is Coinsurance?
Coinsurance is your share of the costs of a health care service. It’s usually figured as a percentage of the amount we allow to be charged for services. You start paying coinsurance after you’ve paid your plan’s deductible.
How it works: You’ve paid $1,500 in health care expenses and met your deductible. When you go to the doctor, instead of paying all costs, you and your plan share the cost. For example, your plan pays 70 percent. The 30 percent you pay is your coinsurance
What is a Copay?
A copay is a fixed amount you pay for a health care service, usually when you receive the service. The amount can vary by the type of service.
How it works: Your plan determines what your copay is for different types of services, and when you have one. You may have a copay before you’ve finished paying toward your deductible. You may also have a copay after you pay your deductible, and when you owe coinsurance.
Your ID card may list copays for some visits.