What is the difference between copayment and coinsurance in health insurance?

In health insurance, a copayment and coinsurance are both forms of cost-sharing, but they function differently. The correct answer highlights that a copayment is a set dollar amount that the insured pays for specific services, such as visiting a doctor or getting a prescription. For instance, a policy might require a $20 copayment for each doctor’s visit.

On the other hand, coinsurance is expressed as a percentage of the total cost of a medical service that the insured pays after they have met their deductible. For example, if a policy has an 80/20 coinsurance split, the insurer will cover 80% of the costs after the deductible is met, while the insured is responsible for the remaining 20%.

This distinction helps subscribers understand their financial obligations when accessing healthcare services. Copayments provide more predictable healthcare costs at the point of service, while coinsurance can lead to varying costs depending on the total amount charged for services utilized. Understanding this difference is crucial for making informed decisions about healthcare expenses and managing overall insurance costs.