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The Advice Centre

Co-insurance vs Co-pay…What's the difference?

Wednesday, October 9, 2013
Insurance Basics, Understanding plan limits / exclusions

What’s the difference between co-pay and co-insurance?

It’s common practice for your home and car insurance to only pay for a certain amount of your claim. There’s usually a portion of the expenses that you are also responsible for. It’s much the same in health insurance; and very few plans pay 100% of medical expenses.

Most people understand a plan deductible, which is a dollar amount that must be satisfied before any claim is paid each plan year. But fewer people understand terms like co-insurance and co-pay and what the difference is between them.

Co-insurance is a percentage of the cost of the health or dental products and services that you claim. You are responsible for a percentage of your costs once any deductible amount has been satisfied. Where a deductible is a set dollar amount you must reach before anything is paid, the co insurance is applied to every claim you make.

A typical co-insurance percentage is 20 percent. For example, if your total claim is $100 and you have a 20% coinsurance, you will be responsible for $20 and your health plan will pay you $80.

Co-insurance can be different for different benefits covered by your plan. For example the coinsurance for major dental and orthodontic coverage may have a different co-insurance percentage.

A co-pay is flat dollar amount that could apply to a specific benefit each time you make a claim. For example if your plan has a per script deductible, this might be considered a co-pay amount because you may have to absorb $5 of the cost for each prescription you claim. Benefit plans are not all the same. Co-insurance percentages can be different from one plan to another and not every plan has a co-pay for benefits.

Read your plan booklet or visit your health insurer’s website to better understand your coverage and protect yourself from unexpected costs. The more you know, the more you can benefit from your health plan.

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