Copay vs Coinsurance vs Deductible: What's the Difference?
Understand the difference between copays, coinsurance, and deductibles. Learn how these insurance terms affect your out-of-pocket costs and when each applies.
Understanding Your Health Insurance Costs
Health insurance uses several cost-sharing mechanisms to split expenses between you and your insurer: deductibles, copays, coinsurance, and out-of-pocket maximums. Understanding how these work together helps you predict your costs and make smarter healthcare decisions. Let's break down each term and see how they interact.
What Is a Deductible?
A deductible is the amount you must pay out-of-pocket before your insurance starts paying for covered services. For example, with a $1,500 deductible, you pay the first $1,500 of covered medical expenses yourself. After you meet the deductible, insurance begins sharing costs through copays or coinsurance. Deductibles typically reset each plan year (January 1 for most plans).
- Common deductible range: $500 - $7,000 for individuals
- Family deductibles are typically 2x individual (embedded or aggregate)
- Preventive care often covered before meeting deductible
- Higher deductible plans have lower monthly premiums
- Some services (like office visits) may have copays before deductible
What Is a Copay?
A copay (copayment) is a fixed dollar amount you pay for a covered service. You might pay $30 for a doctor visit or $15 for generic prescriptions regardless of the total cost. Copays are predictable—you know exactly what you'll pay. Some plans require copays before you meet your deductible; others only apply copays afterward.
- Primary care visit: typically $20-$50
- Specialist visit: typically $40-$75
- Urgent care: typically $50-$100
- Emergency room: typically $150-$500
- Prescriptions: $10-$50 depending on drug tier
What Is Coinsurance?
Coinsurance is your percentage share of a covered service's cost after you've met your deductible. If your plan has 20% coinsurance, you pay 20% of the allowed amount and insurance pays 80%. Unlike copays, coinsurance amounts vary based on the service cost—20% of a $500 procedure is $100, but 20% of a $5,000 surgery is $1,000.
- Common coinsurance: 20% (you) / 80% (insurance)
- Some plans: 30/70, 40/60, or even 50/50
- Only applies after deductible is met (usually)
- Calculated on allowed amount, not billed amount
- In-network coinsurance is lower than out-of-network
What Is an Out-of-Pocket Maximum?
The out-of-pocket maximum (OOPM) is the most you'll pay for covered services in a plan year. Once you reach this limit, insurance pays 100% of covered services. Your deductible, copays, and coinsurance all count toward this maximum. For 2026, ACA plans cap the OOPM at $9,450 for individuals and $18,900 for families.
- Includes: deductible, copays, and coinsurance
- Does NOT include: premiums, out-of-network care (usually), non-covered services
- Once reached, insurance pays 100% for rest of year
- Separate maximums for in-network and out-of-network
- Family plans may have individual embedded maximums
How These Costs Work Together
Here's a real example: You have a $1,500 deductible, $30 copay for office visits, 20% coinsurance, and $6,000 out-of-pocket maximum. You need a $10,000 surgery. First, you pay $1,500 (deductible). Then insurance applies: the remaining $8,500 is split 80/20, so you pay $1,700 (coinsurance). Your total: $3,200. If you had more expenses later, you'd keep paying until you hit $6,000, then insurance covers 100%.
Frequently Asked Questions
What is the difference between a copay and coinsurance?
A copay is a fixed dollar amount (like $30 for a doctor visit) regardless of the service cost. Coinsurance is a percentage (like 20%) of the service cost. Copays are predictable; coinsurance varies based on how expensive the service is.
Do I pay a copay and coinsurance?
Usually not for the same service. Most plans use either copays OR coinsurance for a given service type. For example, office visits might have a copay while hospital stays have coinsurance. Check your plan's Summary of Benefits.
Does my copay count toward my deductible?
It depends on your plan. Some plans count copays toward the deductible; others don't. However, copays almost always count toward your out-of-pocket maximum. Check your specific plan documents.
What happens after I meet my deductible?
After meeting your deductible, insurance begins paying its share. You'll then pay copays or coinsurance (your plan's cost-sharing percentage) until you reach your out-of-pocket maximum, at which point insurance pays 100%.
Is a higher or lower deductible better?
It depends on your healthcare usage. Higher deductibles mean lower monthly premiums but more out-of-pocket costs when you need care. If you rarely use healthcare, a high-deductible plan may save money. If you have ongoing conditions, a lower deductible might be more cost-effective.
What is the difference between deductible and out-of-pocket maximum?
Your deductible is what you pay before insurance starts helping. Your out-of-pocket maximum is the total cap on what you'll pay all year. The deductible counts toward the out-of-pocket max. Once you hit the max, insurance pays 100%.
Confused About Your Insurance Costs?
Upload your EOB or medical bill and we'll break down exactly what you owe and why, translating insurance jargon into plain English.
Related Guides
Lower Your Medical Bill
In-Network vs Out-of-Network: Insurance Coverage Explained
In-network providers have negotiated rates with your insurer; out-of-network providers don't. Learn the cost differences, when to go out-of-network, and how to avoid surprise bills.
What Is an Explanation of Benefits (EOB)? Complete Guide
An Explanation of Benefits (EOB) is a statement from your insurance showing what was billed, covered, and what you owe. Learn how to read and use your EOB to catch billing errors.