Coinsurance vs. Copay

No matter what insurance plan you have, it’s important to understand exactly what you’re responsible for when it comes to costs. Although they aren’t necessarily related, copay and coinsurance can cause some confusion. Copay is an alternative to coinsurance. Certain services a plan will list as flat copays versus other services they may charge a coinsurance.

What is co-insurance?

Coinsurance refers to the percentage you pay for certain health care expenses during a year. After you reach the amount of your deductible, coinsurance will then take over. For example, if you have an “80-20” split with your insurance plan, the insurance company will pay 80 percent of certain health care services while you pay 20 percent.

It’s important to remember that coinsurance will only pay for covered medical services and health care costs. If you’re having an emergency, you should of course always take care of yourself first. But if you’re considering a procedure in the future, make sure to check with your plan provider to see possible costs. Find out what your coinsurance cost will be, if your deductible has been met, and any other out-of-pocket costs you’ll incur.

What does copay mean?

Copay refers to flat fees you’ll pay for medical services or products. Copays are usually applied to certain prescriptions drugs, doctor visits, urgent care, and other services. It makes sense to review when copays are applied to your insurance plan.

It should be noted that copays aren’t affected by your monthly premiums or deductibles. However, they could change based on your annual out-of-pocket costs. Not sure what those limits are or what costs can be applied to that total? Check with your insurance provider so you’ll have a better idea of where you stand.

Other considerations

Does my deductible affect how much I pay out of pocket?

As we mentioned above, out-of-pocket costs for co-insurance depend a lot on your health insurance plan deductible. Basically, a deductible is an amount you pay before your insurance begins to kick in. If your annual deductible is a certain amount, you will pay that amount of money out of pocket for certain medical bills before the health insurance companies start paying.

What are out-of-pocket maximums?

In many health insurance plans, your insurer pays all costs of health care after you’ve paid a certain amount of money for that year. When it comes to certain parts of Medicare, however, there are no out-of-pocket maximums. There are no limits for Original Medicare, which includes Parts A and B.

There is a maximum out-of-pocket cost when it comes to Medicare Advantage plans, however. Medicare sets a threshold for maximum out-of-pocket limits. When you reach those limits, Advantage plans pay for everything after that (if it is covered). However, every Medicare Advantage plan can set lower limits.

Medicare Supplemental coverage is an alternative form of coverage that is available to go along with Original Medicare. These plans could cover medical costs, including deductibles, coinsurance, and copays. Although Medicare supplemental coverage is standardized throughout the country, Wisconsin, Massachusetts, and Minnesota have slight variations.

There are a lot of moving pieces when it comes to health care insurance, cost-sharing, deductibles, copays, and coinsurance. When you receive insurance through an employer, many of the decisions are already made for you. With Medicare, there seems to be no shortage of options. But you don’t have to go it alone.

Work with Medicare specialists

We understand how stressful it can be to find the right plans for you, especially as changes happen seemingly every year. We are an unbiased source of information and take the time to learn what you need from your Medicare plan.

Our insurance specialists are here to answer your questions, from explaining exactly what your co-pay will be to how much your co-insurance covers. We’ll be able to tell you when enrollment dates are, how to change your plans after life changes, and what primary care physicians or doctor offices accept your plan.

Reach out to Medicare Insurance Advisors to see how we can help you.