What Is the Difference Between, Copays, Deductibles, and Coinsurance?
Health care terms can be confusing. But when it comes to payment types, it’s helpful to know the meaning of the different terms so you know what form of payment is required. The most common types are copays, deductibles, and coinsurance. All three are different types of cost sharing, which is the portion you pay for a medical service or prescription drug.
What is a copay?
A copay is a fixed amount you pay for a health service, seeing your doctor, or filling a prescription. Copays cover your cost of a doctor’s visit or medication. You may not always have a copay, however. Your plan may have a $0 copay for seeing your doctor, for example, in which case you would not have to pay a copay each time you visit your doctor. When you do have a copay, the cost will be the same amount every time you receive the service or medication during the year.
What is a deductible?
A deductible is the amount you pay for a service before the plan shares the cost of the service with you. There could be a deductible on medical services or on prescription drug services, but not all plans have a deductible. For example, if your plan had a $200 prescription drug deductible, you would pay the first $200 of your prescription drug costs before your plan helps to pay. If your plan had a $0 prescription drug deductible, your plan would help pay for your prescription drug costs without you having to pay a certain amount first.
What is coinsurance?
Coinsurance is when you pay a percentage of the cost for an item, prescription drug, or service. For example, if a medical service has a 20 percent coinsurance, you would pay 20 percent of the cost and your plan would pay the other 80 percent. Coinsurance is when you and your plan both share a percentage of the cost of a service, prescription drug, or item that adds up to 100 percent.
For more information on common health care terms, use this helpful glossary.
How do I know if a copay or coinsurance applies?
For benefits and services:
- Your Evidence of Coverage document (available on our Plan Documents page) lists all your benefits in chapter four and the copayments or coinsurance that applies to each benefit.
For prescription drugs:
- The formulary lists all the prescription drugs your plan covers. The plan you are in and the tier your drug is on determines the cost of the drug and whether a copay or coinsurance is required. You’ll find the tier number listed next to each drug. In general, the lower the tier, the lower your cost for the drug. Plus, if the retail cost for a drug is lower than your copayment, you pay the lower amount.
- In your Summary of Benefits you can find the cost to you for medications by their tier. The Summary of Benefits will show either a $-dollar amount for the drug if a copay is required or it will show a %-percentage if coinsurance is required.
- If your medication requires coinsurance, you will need to know the retail cost of the drug and then calculate the percentage of that you will need to pay. You can find out the retail cost of the drug by either asking your pharmacist or using our online drug pricing tool.
- With coinsurance, you may notice that the cost you pay may change from one prescription to the next because the retail cost of a drug can be different depending on the pharmacy or time of the year.
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