What’s the difference between insurance deductible, coinsurance, and copay?


Many people are confused about the differences between what is an insurance deductible, co-pay and coinsurance. All three represent the portion of the medical bill that you are responsible for in case you get sick or injured. However, there are some differences:

Deductible:  A deductible is usually a fix dollar amount that you have to pay out of your own pocket before the insurance will cover the remaining eligible expenses.

Depending on the insurance plan, the deductible can range from $0 all the way up to thousands of dollars. It can also be paid per sickness/injury (per condition) or per certificate period.

As a rule of thumb, the higher the deductible the lower the premium (price to buy the plan) would be and vice versa. Be sure to choose the deductible that is appropriate for your circumstances when purchasing an insurance policy.

Coinsurance: A coinsurance is usually a percentage that the insurance will pay toward your eligible medical expenses. Some common coinsurance includes: 100%, 80/20, 90/10 and 50/50. As an example if you have a 80/20 coinsurance, it means that the insurance company will cover 80% of your medical cost and you are responsible for paying the other 20% yourself.

A deductible is commonly use together with a coinsurance. In this case you would pay the deductible amount first and after you would have the left over coinsurance amount.

Copay (copayment): Copays are similar to deductible, it is usually a fix amount of money you have to pay each time you need to use the insurance. A copay is usually small amount that you pay which applies to certain benefits like general doctor visit or prescription medication.

An insurance policy may have a deductible, coinsurance, copay, any combination of the three or none at all.

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