Copays, Deductibles and Coinsurance

How do out-of-pocket costs work?

Copays, deductibles, and coinsurance let you know when and how much you may need to pay for your health care. We’re here to help you understand the meaning of these important health care terms.

Copays, Deductibles, and Coinsurance Definitions

Let's take an in-depth look at what these terms mean, how they work together, and how they are different.

Copays

What is a copay?

A copay (or copayment) is a flat fee that you pay on the spot each time you go to your doctor or fill a prescription. For example, if you hurt your back and go see your doctor, or you need a refill of your child's asthma medicine, the amount you pay for that visit or medicine is your copay. Your copay amount is printed right on your health plan ID card. Copays cover your portion of the cost of a doctor's visit or medication.

Do I always have a copay?

Not necessarily. Not all plans use copays to share in the cost of covered expenses. Or, some plans may use both copays and a deductible/coinsurance, depending on the type of covered service. Also, some services may be covered at no out-of-pocket cost to you, such as annual checkups and certain other preventive care services.

Deductibles

What is a deductible?

A deductible is an amount you pay each year for most eligible medical services or medications before your health plan begins to share in the cost of covered services. For example, if you have a ₹30,000 yearly deductible, you'll need to pay the first ₹30,000 of your total eligible medical costs before your plan helps to pay.

Deductibles for family coverage and individual coverage are different. Even if your plan includes out-of-network benefits, your deductible amount will typically be much lower if you use in-network doctors and hospitals.

How do I decide what deductible amount to choose?

If you're mostly healthy and don't expect to need costly medical services during the year, a plan that has a higher deductible and lower premium may be a good choice for you.

On the other hand, let's say you know you have a medical condition that will need care. Or you have an active family with children who play sports. A plan with a lower deductible and higher premium that pays for a greater percent of your medical costs may be better for you.

What is the difference between a deductible and a copay?

Depending on your health plan, you may have a deductible and copays.

A deductible is an amount you pay for most eligible medical services or medications before your health plan begins to share in the cost of covered services. If your plan includes copays, you pay the copay flat fee at the time of service (at the pharmacy or doctor's office, for example). Depending on how your plan works, what you pay in copays may count toward meeting your deductible.

Coinsurance

What is coinsurance?

Coinsurance is a portion of the medical cost you pay after your deductible has been met. Coinsurance is a way of saying that you and your insurance carrier each pay a share of eligible costs that add up to 100 percent.