What’s the Difference Between Them?


Regardless of where you get health insurance, you’re responsible for paying part of your healthcare costs. Cost-sharing occurs when you need treatment, prescriptions, or services that aren’t fully covered by your health insurance plan.

Usually, the lower your health insurance premium, the higher your cost-sharing payments, and vice versa. Copays, coinsurance, and deductibles are the three ways you share healthcare costs with your insurance.

The difference between copays and coinsurance is particularly confusing, but it’s difficult to understand exactly how each works without also understanding health insurance deductibles. And you really do need to get all three to choose the right health insurance plan, get the most out of it, and budget for inevitable out-of-pocket healthcare costs.

Coinsurance vs. Copays

Cost-sharing has three main components: copays, coinsurance, and deductibles. 

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To understand one element, it’s important to understand its relationship to others. Each comes into play at different times and manifests in different ways. 

For example, one might appear as a flat fee, while another is calculated as a percentage of the total cost of the covered service. Importantly, you continue paying copays and coinsurance even after you meet your annual deductible. 


A health insurance deductible sets a limit on how much you pay out of pocket before the plan begins covering its share.  The deductible resets every calendar year, typically on January 1, rather than being a one-time cost. Consequently, if the end of the year is approaching and you’ve already met your deductible for the year, consider setting appointments before your annual deductible resets.

Homeowners and auto insurance policies often don’t pay any benefits until you meet the deductible. However, health insurance generally covers some costs before you reach the deductible, such as annual checkups and certain prescription drugs.

Suppose your deductible is $2,500. Then, you’re responsible for the first $2,500 of your medical bills out-of-pocket before my insurance pays for covered services. Insurance covers the majority of your costs after meeting the deductible, but you would still have copay and coinsurance payments.

Some health insurance plans have separate healthcare and prescription drug deductibles. For example, my insurance has a $2,500 annual deductible for in-network medical care including hospitalization and doctor’s visits. But it also has a $300 prescription deductible. 

Not all plans do this. Some have a single deductible for healthcare and prescriptions.


Coinsurance is the percentage of your medical bills that your insurer pays and you pay. Affordable Care Act plans are categorized by coinsurance level to help you identify how much of the costs you’re responsible for paying.

Category Your insurer pays You pay
Bronze 60% 40%
Silver 70% 30%
Gold 80% 20%
Platinum 90% 10%

Let’s say your coinsurance is 80/20. This means your insurer pays 80% of covered healthcare costs and you pay 20%. If you receive a bill for $100, you pay $20 out of pocket and your insurance plan spends $80.

However, you don’t start paying coinsurance until you’ve met your deductible. If your plan has a $3,000 deductible and 80/20 coinsurance, you would pay the first $3,000 of medical bills for the year, aside from preventive care services that the plan covers anyway. You then pay for 20% of any further costs above the $3,000 limit.


Your copay, or copayment, is how much you pay at the time of treatment. 

Your health insurance might have different copays depending on what treatment you need. For example, you might have a $25 copay for preventive care, $40 for specialist consultations, and $150 for emergency room visits. 

Prescription medication copays usually depend on the drug type and cost. Health insurance plans break them into tiers: generics in the lower tiers, brand-name drugs in the middle tiers, and highly specialized drugs in the upper tiers. You pay a prescription copay each time you pick up a pharmacy medication.

Copays count toward your annual out-of-pocket maximum but not toward your deductible. 

Differences Between Coinsurance & Copays

Copays and coinsurance costs come into the picture at different phases of your healthcare services. Copays traditionally occur when you receive treatment, while coinsurance is billed in arrears.

Suppose you went to see your primary doctor because of frequent headaches. Your copay is $25. The doctor checks your blood pressure and it’s high. So, the doctor orders diagnostic blood work to see if there is anything else going on.

Assuming you have a 80/20 coinsurance and already met your deductible for the year, you would pay the $25 copay and 20% of the medical bill. If the doctor’s services and diagnostics were $1,000, you’d pay an additional $200 for this visit, for a total of $225.

Coinsurance Copay
Amount based on care cost Fixed amount
Calculated as a percentage, such as 80/20 Calculated as a dollar amount, such as $25
Maintains percentage regardless of service or provider Varies based on service or provider
Starts after deductible fulfilled Charged copays until reaching the annual maximum out-of-pocket limit

Copays can vary depending on where you seek treatment. 

For example, a hospital copay is likely to cost significantly more than visiting an urgent care clinic. Your primary care physician typically has a lower copay than a specialist provider in your network. 

Treatments like physical therapy often have separate copays as well. Depending on your plan, the amount can vary depending on whether your policy considers it a specialist or primary provider.

In-Network vs. Out-of-Network

Usually, your health insurance focuses your cost-sharing rates based on in-network providers. 

In-network providers are doctors, clinics, pharmacies, and other service providers that agree to accept your insurance. Health insurance companies prefer that you use in-network providers because they’ve already prenegotiated lower rates.

Out-of-network providers can be located in the same city or in another state. Regardless, they don’t have a contract with your insurance company. If you use one of these providers, your insurer will pay significantly less towards your care, or perhaps nothing at all.

You should expect to pay higher copays and coinsurance if you use an out-of-network provider for routine or elective care. However, in an emergency like a car accident or heart attack, most health insurance have some cost protections in place for out-of-network providers. 

For example, my health insurance has the same cost-sharing for emergency room care and ambulance services regardless of whether it’s in-network or out. Check your plan’s summary of benefits and coverage for details.

Out-of-Pocket Maximums

Your out-of-pocket maximum is the most you would pay toward your medical care for the year. That includes copays, coinsurance, and money paid toward your deductible. 

However, your monthly premium does not count as an out-of-pocket maximum. Premiums are the insurance costs you pay to keep the insurance policy in force, whether you use it or not.

In 2022, the maximum out-of-pocket limit for an ACA-compliant plan was $8,700 for individuals and $17,400 for families. If you have several family members on your plan, each person must reach their out-of-pocket maximum separately, until the family reaches the overall limit. 

For example, suppose you have a difficult childbirth and quickly reach your individual out-of-pocket of $8,700. If your total expense tops out at $20,000 for the year, you pay $8,700, spread between your deductible and coinsurance. The insurance company pays $11,300.

Now, let’s say your newborn requires significant care as well. If the infant’s medical bills come to $3,700, you’ll need to pay that out of pocket. Your family will have paid $12,400 total out of pocket for the year — leaving it $5,000 short of the $17,400 family out-of-pocket maximum. Should your child or another family member require any additional care before the end of the year, you could still pay up to $5,000 out of pocket.

It’s worth noting that your plan may have a separate out-of-network maximum that’s significantly higher than your in-network maximum. 

And if you require treatment that exceeds your plan’s allowed amount, you’re expected to cover the difference. For example, suppose your plan allows $2,000 for an MRI, but the provider charges $3,000. You’d have to pay the difference or work with the provider to reduce its costs.

Choosing Between Coinsurance & Copay Health Plans

When choosing a health plan, the rule of thumb is that higher premiums usually mean lower out-of-pocket expenses. If you choose a plan with lower premiums, you take on more financial risk that a health condition could cost more on the back end.

For example, suppose you are trying to decide between a silver and gold health insurance plan. The silver plan is $400 per month and has a $75 primary doctor copay, a $5,300 deductible, and a 70/30 coinsurance. The gold plan is $600 per month, a $10 primary doctor copay, a $2,500 deductible, and 80/20 coinsurance. 

You should consider how often you need medical services, which prescription drugs you take, and how much you can afford each month. Then, compare that data against the risk of having higher out-of-pocket costs if you need to use your insurance.

The trouble with choosing a healthcare plan based on premiums is that the higher your out-of-pocket expenses are, the more likely you are to ignore health concerns because of how much it will cost to seek treatment.

Coinsurance vs. Copay FAQs

Making sense of health insurance copays and coinsurance is difficult, particularly when you’re not sure what medical bills will end up in the mailbox. Here are some of the most common questions you’ll have as you navigate the medical minefield.

Do Coinsurance & Copays Count Toward My Deductible? 

It depends on your plan. Though most plans don’t count copays toward the deductible, some do. 

Likewise, you might encounter a provider that doesn’t charge a copay when you visit. Instead, they bill you for the copay later.

As for coinsurance, you generally don’t pay coinsurance before meeting your deductible. But this isn’t an absolute rule. For example, your insurer might bill you for a coinsurance percentage of a hospital stay, and those payments would count toward your deductible.

Bottom line: Check with your plan provider to find out how they treat copays and coinsurance relative to the deductible.

How Do I Find Out What My Coinsurance or Copay Is?

There are several ways to determine your coinsurance and copay amounts:

  • Check the summary of benefits and coverage you received during plan enrollment.
  • Look on your health insurance card, since most list copays on the front. The card may or may not show the coinsurance amount (mine does not). 
  • Access your health insurer’s website. The dashboard or claims section may help, but you can also download your Summary of Benefits and Coverage.
  • Call your insurer and ask. You can also inquire about specific coverage concerns.
  • Ask your employer’s HR department to help you find the information.

Are Coinsurance & Copays Tax-Deductible? 

Coinsurance and copays can be tax-deductible if your out-of-pocket medical expenses were more than 7.5% of your adjusted gross income that year. Insurance premiums are not tax-deductible.

Is There Always a Copay or Coinsurance? 

There are many different health insurance plans out there and some may not require you to pay copays or coinsurance. 

For example, ACA-compliant plans offer a menu of preventative care that has no copay or coinsurance. High deductible health plans (HDHPs) may not require a copay because you must pay the deductible before the plan begins paying for covered services. 

Can a Plan Have Both Copay & Coinsurance? 

Yes, you might pay both a copay and coinsurance for the same visit. Suppose a doctor’s office visit has a $25 copay and you’ve already met your deductible for the year. You would pay the $25 and your coinsurance rate — say, 80/20 — for the remaining charges up to the out-of-pocket maximum.

Do Affordable Care Act Plans Have Copays or Coinsurance?

Affordable Care Act plans have copays, coinsurance, and deductibles. However, some services are available without cost-sharing, such as certain preventive screenings, immunizations, and counseling.

Do High-Deductible Health Plans Have Copays or Coinsurance? 

HDHPs can have copays or coinsurance, but it depends on the plan. You should expect to pay for healthcare costs until you meet your deductible. After that, copays and coinsurance come into the mix.

Does Medicare Have Copays or Coinsurance? 

Original Medicare, Medicare supplement, and Medicare Advantage plans have copays and coinsurance. The copay and coinsurance amount depends on how your Medicare plan is set up.

Final Word

Every year when I look at new health insurance plans on the federal health insurance marketplace, I consider the advice my father gave me twenty years ago, “buy the best health insurance you can afford.” He meant that in a medical emergency, the out-of-pocket bills like copays and coinsurance can add up quickly. 

Even if you have health insurance, greater cost-sharing amounts like copays and coinsurance can increase the likelihood of medical debt. If you have limited savings to cover cost-sharing, paying a higher monthly premium can reduce your out-of-pocket costs.

Familiarizing yourself with how copays and coinsurance work is the best way to manage cost-sharing and decide which health insurance plan is right for you. When you understand how much you could pay out of pocket, you’ll be in a much better position to budget the right amount to cover your share of the potential costs.

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