Two ways you share costs with your insurer — and why it matters which one applies.
After you meet your deductible, you still don't get everything for free. You share the remaining costs with your insurance company in one of two ways: a copay or coinsurance.
A copay is a fixed fee you pay every time you use a specific service — no matter what the total bill is.
Examples:
Simple. Predictable. You know exactly what you'll owe before you walk in.
Coinsurance is your share of the cost — expressed as a percentage. A common split is 80/20, meaning your insurance pays 80% and you pay 20%.
Example: You have a $2,000 hospital bill after your deductible. With 80/20 coinsurance, you owe $400 and insurance pays $1,600.
This one can surprise people. 20% sounds small until the bill is $10,000.
Some services use copays. Others use coinsurance. Sometimes both appear on the same plan. Your Summary of Benefits document (the plan comparison sheet) spells out which applies to which type of care.
Here's the good news: your coinsurance doesn't go on forever. Once you hit your out-of-pocket maximum for the year, insurance pays 100% of covered services. That's your financial ceiling. Once you hit it, you're done paying for the rest of the year.