Health Insurance Terminology

Navigating health insurance terminology can often seem daunting, but understanding key concepts is crucial to making informed decisions about your healthcare.

Understanding Co-payment vs. Co-insurance in Health Insurance

Two terms that frequently cause confusion are co-payment and co-insurance, both of which relate to your share of health care costs but function differently.

A co-payment is a fixed amount you pay for a specific health care service or medication. For example, you might have a $12 co-payment for a doctor’s visit or a $10 co-payment for a prescription. Co-payments are predetermined, allowing you to know exactly how much you’ll owe each time you receive care.

Co-insurance, on the other hand, is a percentage of the cost of a healthcare service that you’re responsible for paying. If your health plan has a 20% co-insurance rate, and the cost of a service is $100, you would pay $20, while your insurance covers the remaining $80.

By understanding the difference between co-payment and co-insurance, you can better manage your health care expenses and choose services that align with your financial and health needs.