Copays, Coinsurance, and Deductibles

All healthcare plans have out-of-pocket expenses. They can generally be categorized as copays, coinsurance, and deductibles, as well as monthly premiums. Let’s review them and see how they can affect your annual costs.


A copay is a pre-determined amount you pay to any healthcare provider under your plan. Examples of this can include $25 you pay to your doctor each time you visit, a minimum drug cost for generics or other drugs, or a fee paid for a diagnostic test.


Coinsurance is the percentage of all costs paid each year per your plan. For example, your insurance may pay 80% of covered costs, and you are responsible for the 20% coinsurance payment. Coinsurance typically becomes active each year after your deductible (explained below) is met.


The annual deductible is what you must pay at the beginning of each year before your insurance starts paying their plan percentage. If you have a $1000 deductible, all doctor visits, drugs, and tests are your responsibility until that $1000 is paid. Then the insurance will start paying their agreed percentages. Please review our blog on high- versus low-deductible health insurance to understand the differences in the cost to you.

Keep in mind there are also monthly insurance premiums that you are responsible for paying to keep your insurance active. This premium is due whether you use any services or not, so keep it in mind when you are calculating your annual healthcare expenses. Most plans also have an out-of-pocket maximum which is the most you will have to pay each year. After you reach that maximum your insurance company will pay all covered expenses until the next plan year begins.

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