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There are three types of out-of-pocket expenses that include copayments, coinsurance, and deductibles. The following article explores two of these health insurance terms, copayment, and coinsurance, and explains their similarities and differences.
What is the copayment?
The copayment is the amount that the patient must pay directly to the doctor, hospital, or health care provider for each visit. It also applies to drugs purchased in pharmacies and is charged for each prescription. This transfers a portion of the responsibility for paying the medical bill to the patient and ensures that the patient does not visit the doctor unnecessarily. Patients generally pay between $ 15 and $ 50 as a copayment for each visit they make to a healthcare provider. However, the amount charged as a copayment depends on several factors. For visits to specialists, the copayment is generally higher than for general practitioners. Buying generic drugs versus brand-name drugs reduces copayment. What’s more, contracts that insurance companies have with health care providers also affect copayments.
What is coinsurance?
Coinsurance is a mechanism by which the patient shares the cost of medical care with the insurance company. For example, if the cost-sharing ratio is 70/30, then the insurance company covers 70% of the total health care cost for the year and 30% is covered by the patient. However, in most cases, once the medical cost reaches the patient’s full out-of-pocket maximum, the cost-sharing between the parties stops. If the patient’s total annual medical bill exceeds the out-of-pocket limit per year, the insurance company covers the rest of the medical expenses for that year. Coinsurance is generally higher if the health care provider is not in the insurance company’s provider network.
What is the difference between copayment and coinsurance?
Health insurance generally does not cover 100% of total medical bills. Several payments must be made by the patient, including copayment and coinsurance payments. Both are methods used by insurance companies to share medical costs with patients. As with the copayment, the amount that must be paid for each visit to a health care provider or each prescription filled is established. There are no surprises for the patient since the same amount is paid in each case. However, coinsurance payments are not set amounts (as they are charged as a percentage) and vary based on the cost of the procedure or the costs of additional problems and complications. An insurance company rarely uses both copayment and coinsurance.
Copayment vs coinsurance
• Health insurance generally does not cover 100% of the cost. And the part of the cost that health insurance does not cover is a customer’s out-of-pocket expense.
• There are two types of out-of-pocket costs, including copayment and coinsurance.
• The copayment is the amount that the patient must pay directly to the doctor, hospital. Or health care provider for each visit. The copayment also applies to drugs purchased in pharmacies. And is charged for each prescription.
• Coinsurance is a mechanism by which the patient shares the cost of medical care with the insurance company. For example, if the cost-sharing ratio is 70/30. Then the insurance company covers 70% of the total cost of medical care for the year. And 30% is covered by the patient.
• The copayment is a fixed amount, while the coinsurance payments are charged as a percentage. And vary based on the cost of the procedure or the costs of additional problems and complications.