insurance

5 essential facts about health insurance

Copayment and coinsurance are not the same
Copayment and coinsurance are not the same © gwolters/Shutterstock.com

While copayments and coinsurance are both types of cost-sharing between the consumer and the insurance company, they are two distinct types of payments, notes Michelle Katz, a nurse and the author of "Healthcare for Less" and "101 Health Insurance Tips."

In a copayment, also known as copay, the patient pays a specific flat dollar amount to the provider, usually for each service or treatment, such as $25 for a checkup.

Coinsurance, on the other hand, is a percentage of costs that a patient must pay after the deductible is met. "For example, you may have a deductible of $250 before insurance will cover 80 percent of charges, leaving you responsible for the other 20 percent -- known as coinsurance," Katz explains.

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