How does coinsurance differ from a copayment in medical expense insurance?

• A. Coinsurance is a fixed fee at service; copayment is a percentage after deductible.
• B. Coinsurance only applies to drugs; copayment applies to hospital stays.
• C. Coinsurance is a percentage of covered expenses after deductible; copayment is a fixed amount paid at the time of service.
• D. Coinsurance applies before deductible; copayment applies after.

Answer: (D)

The key idea is how you share costs with the plan through different cost-sharing features. A copayment is a fixed dollar amount you pay for a covered service at the time you receive it. For example, you might pay a set $20 for a doctor visit, and the plan covers the rest according to its rules. Coinsurance, on the other hand, is your share of the costs expressed as a percentage after you’ve satisfied the deductible. Once the deductible is met, you pay a portion of the allowed charges (for instance, 20%), and the insurer pays the remaining portion.

So the typical distinction is fixed payment at the time of service (copayment) versus a percentage of costs after the deductible is met (coinsurance). The statement that coinsurance applies before the deductible and copayment applies after is not the usual characterization of these terms; many plans vary, but the standard concept to keep in mind is fixed copayments at service time versus percentage-based coinsurance after meeting the deductible.