How does a copayment differ from coinsurance?

A copayment is a fixed dollar amount that a patient pays for specific healthcare services at the time of service, such as a doctor’s visit or a prescription. This amount does not vary based on the cost of the service. For example, a health insurance policy might require a $20 copayment for a primary care visit, meaning that regardless of the total bill for that visit, the patient pays $20.

On the other hand, coinsurance is a percentage of the total cost of the healthcare service that the patient is responsible for after meeting their deductible. For example, if a patient has a health insurance plan with a coinsurance of 20% and has a medical procedure that costs $1,000, the patient would pay $200 as their share (20% of $1,000), while the insurance company covers the remaining $800.

Understanding these distinctions is crucial for managing out-of-pocket costs related to healthcare. This understanding helps patients anticipate their expenses and navigate their insurance plans more effectively.