Employee Benefits

What’s the Difference Between a Copay and Coinsurance?

4 min read Oct 24, 2022

A copay is a fixed cost ($40, for example) that an insurance policyholder pays for a specific service covered by insurance. Coinsurance, on the other hand, is paid as a percentage of the cost of a service. Copays and coinsurance apply in different situations, but both are expenses associated with your insurance plan.

Navigating the various out-of-pocket costs of insurance can seem daunting. Although the details vary depending on your provider and the plan you choose, there are some general terms that remain the same. Copays and coinsurance are two such terms, and they aren’t interchangeable.

So, what is the difference between a copay and coinsurance? Let’s break it down further.

Copay vs. coinsurance: understanding the differences

Copays and coinsurance apply to several forms of insurance, including health, vision, and dental. The easiest way to remember the difference between a copay and coinsurance is this:

  • Copayments are fixed fees your provider charges for services.
  • Coinsurance is a percentage of the cost you pay for services.

In other words, a copay that’s $20 will always be $20. But a 20% coinsurance fee will change depending on the cost of the service. The rates for each depend on the policy you’ve chosen. An insurance plan with higher premiums typically has lower copays and coinsurance fees.

It’s important to remember that there are different copays for different services. An emergency room copay isn’t the same as a general provider office exam copay. However, your coinsurance rate is always the same regardless of the service or procedure.

In a plan’s terms, you’ll sometimes see coinsurance represented as a ratio. An “80/20” health insurance plan means your insurance will cover 80% of the cost. You’re responsible for the remaining 20%.

Another key difference between the two out-of-pocket expenses is when you have to pay:

  • Coinsurance applies only after you’ve met your deductible.
  • Copayments often apply both before and after you’ve met your deductible.

Your deductible is the amount of money you have to pay out-of-pocket for covered services before your insurance starts to pay. Since coinsurance only applies after that, it doesn’t contribute to your deductible. Copays apply both before and after, but they usually don’t count toward your deductible, either.

Let’s review the key differences between copay and coinsurance:



A fixed amount paid to your medical provider for services

A percentage of the total cost 

Can apply before and after you reach your deductible

Applies only after you reach your deductible

Copays, coinsurance, and out-of-pocket maximums

Copays and coinsurance are out-of-pocket costs. That means you, the policyholder, are responsible for paying them. But that also means they contribute to your out-of-pocket maximum — which is the most you’ll have to pay out-of-pocket each year.

Every time you make a copayment or foot the bill for coinsurance, it brings you closer to your out-of-pocket maximum. Once your out-of-pocket maximum is reached, your insurance is responsible for 100% of the cost of covered services for the remainder of the year.

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This article is intended to provide general information about insurance. It does not describe any Metropolitan Life Insurance company product or feature.