Are Copays and Coinsurance Different – Copays vs Coinsurance
When you’re reviewing Medicare or health insurance options with a client, one common question that comes up is; are copays and coinsurance different or are they the same. When you’re reviewing Medicare or health insurance options with a client, this can be a common point of confusion. Although both are types of cost-sharing; the portion of healthcare costs the beneficiary pays out of pocket, they work in different ways.
Let’s break it down so you can explain it simply and clearly to your clients.
What is a Copay
A copay is a fixed dollar amount a beneficiary pays for a covered service, no matter the actual cost of the service.
- Example: If a client’s plan lists a $20 copay for a primary care visit, they’ll pay $20 every time they see their doctor for a covered appointment; whether the visit costs $80 or $300.
- Common Copay Examples: Doctor visits, urgent care, prescription drugs.
- Key Point: Copays make healthcare costs predictable.
What is Coinsurance
Coinsurance is a percentage of the total cost of a covered service that the beneficiary pays.
- Example: If a plan has 20% coinsurance for outpatient surgery and the procedure costs $1,000, the client pays $200, and the insurance pays the rest.
- Common Coinsurance Examples: Hospital stays, durable medical equipment, specialist visits under certain plans.
- Key Point: Costs vary based on the service price—no set dollar amount.
How They Work Together
Some services have only a copay, some have only coinsurance, and others might have a combination. For example:
- A specialist visit might have a $40 copay.
- A hospital stay might require 20% coinsurance after the deductible.
Understanding when each applies can help clients better anticipate out-of-pocket costs.
Why It Matters for Medicare Beneficiaries
In Medicare Advantage (Part C) and Medicare Supplement (Medigap) plans, the mix of copays and coinsurance impacts:
- Affordability: Clients with frequent doctor visits may prefer fixed copays.
- Risk: Clients who may face high-cost procedures should understand coinsurance percentages.
- Budgeting: Predictable costs (copays) can make financial planning easier.
Agents see how easy it is to compare MA plans with Sunfire and Connecture
Comparison Table
| Feature | Copay | Coinsurance |
|---|---|---|
| Type | Fixed amount | Percentage of cost |
| Predictability | Always the same amount | Varies by service cost |
| When Used | Office visits, prescriptions | Hospital stays, surgery, DME |
| Example | $25 per doctor visit | 20% of procedure cost |
Click here to learn about agent events and information
For an online agent contract – click here and be part of the Crowe team
In other words; copays are a set price you pay every time you visit a specific type of provider. While coinsurance is a percentage of the cost for a provider visit. By making sure your clients understand both, you help them avoid surprise bills and choose a plan that matches their healthcare needs and budget.