Copay, coinsurance and out-of-pocket maximum

Using your insurance plan may be easier when you understand common health care terms and what they mean. It also may make it easier to manage your health care costs when you learn what the cost terms mean for your wallet. So, let’s take a closer look and learn the difference between copays, coinsurance and out-of-pocket maximums.

What is a copay?

A copay (or copayment) is a fixed amount you may pay for a covered health care service, usually at the time you receive the service

How does a copay work?

You might remember times when you went in for a doctor visit and maybe paid a $15 or $20 copay before or after your visit. Copay amounts can vary depending on the provider and service. With health plans that have copays (not all do), you’ll know exactly what you have to pay ahead of time – which can help you budget your health care costs. For most plans, your copay does not apply toward your deductible. Also, some services may be covered at no additional cost, or $0 cost share, such as annual wellness exams and certain other preventive care services.

What is copay?

Compare how copays and coinsurance work

There's a lot to understand when you're sorting out the difference between copays and coinsurance. Here's a quick view to help explain how these two types of payments work differently. 

  Copay Coinsurance
What is the amount paid? Flat dollar amount Percentage of the cost, if you've met your deductible
When is it paid? Typically paid at the time of service Billed by the provider who you will pay directly
Does it count toward your deductible? No, not in most plans  
Does it count toward your out-of-pocket max? Yes Yes

Knowing how copays, coinsurance and out-of-pocket maximums work can help you add up your potential costs more accurately when you're planning for the year or when you're choosing your health plan during open enrollment