Coinsurance vs Copayment

Coinsurance is a percentage of the covered charge shared by the insured, while a copayment is a fixed dollar amount per service — Coinsurance is cost-sharing expressed as a percentage, for example the insurer pays 80 percent and the insured pays 20 percent of covered charges after the deductible. A copayment is a fixed dollar amount charged for a specific service, such as $30 for an office visit or $10 for a generic prescription. Both are forms of cost-sharing, but one varies with the size of the bill and the other is a flat fee set in the contract. Each counts toward the plan's annual out-of-pocket maximum, so the insured's total exposure is capped once both are added up for the year.

National insurance concept

The portion of covered expenses the insured pays after the deductible, with the insurer paying the remaining 80 percent — Coinsurance is a cost-sharing feature in which the insured and the insurer split covered expenses in stated percentages once the deductible is satisfied. In an 80/20 plan, after the deductible, the insurer pays 80 percent of covered expenses and the insured pays 20 percent, until the plan's out-of-pocket maximum is reached. It differs from a copayment, which is a fixed dollar amount per service, and from the deductible, which is an annual threshold paid before coinsurance starts. Understanding how the deductible, coinsurance, and maximum out-of-pocket interact is a core contract-provision topic for medical expense plans (AH-III.A.1d).

National insurance concept