Copay VS Coinsurance: Know The Difference

copay vs coinsurance: know the difference text overlaying image of a filing cabinet with medical bills written on it Health insurance can be confusing. With all the terms like deductibles, premiums, copayments, and coinsurance, some of which people often mistake for each. Those last two – copayments (or copays) and coinsurance – can be particularly problematic when it comes to confusion. Not only that, but many people are not sure when they will be required to pay them, or how they add to their out-of-pocket costs. But simply being aware of the difference between the two, and knowing how they work in your plan, can save time and energy. As well as money that would otherwise be wasted.

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What Are Copays?

A copay is a predetermined amount of money you must pay when you use a medical service at the point of service. Health insurance policies typically specify copayment amounts in advance, and the amount will be different for each type of service. Examples of services that might require copayments include visits to your primary care physician, appointments with a specialist, prescriptions drugs, and emergency room visits. You might, for instance, have to pay $20 each time you see your primary care physician.


After you pay your copayment for a covered service, the insurance company will often pay for the rest. Especially for preventive care. For example, your annual check-up is a service your plan covers. So, you will only be responsible for your copay in this case. You should always check your plan’s benefits summary for specifics. But in general, copays are not included in the calculation of your maximum out-of-pocket costs.

What Is Coinsurance?

Most health insurance plans require that you pay coinsurance, or a percentage of the cost of care. With most plans, you’ll first have to meet your annual deductible. Then your insurance company will begin to cover your care, but you will have to split the cost. Your coinsurance share will depend on your plan, but you might have to pay 20% of each bill, for example. 


In addition, the coinsurance percentage you’ll have to pay may vary depending on the type of medical treatment you receive. For example, you might have to pay a different amount of coinsurance for things like office visits, tests, and medications. 


And, if you have a preferred provider organization (PPO) plan, you’ll most likely have to pay different amounts of coinsurance. Depending on whether or not the healthcare provider you see is in your plan’s network. For example, coinsurance for a primary care physician in your network could be 20%, while coinsurance for a primary care physician outside of your network could be 75%. That means you can lower your out-of-pocket expenses by trying to get care from in-network providers whenever possible. 

How Much Should You Expect to Pay in Coinsurance?

You won’t know exactly how much you’ll end up paying in coinsurance each year, but you can estimate your out-of-pocket costs by thinking about how much care you anticipate needing. The coinsurance you pay on that care will be a chunk of your out-of-pocket expenses, in addition to your monthly premium and your annual deductible. 


Your share of your medical costs will be determined by the type of plan you choose. You can choose from Bronze, Silver, Gold, or Platinum plans, each of which will require that you pay a different percentage of your medical costs:


  • Bronze – 40/60, You pay 40% while your insurer pays the remaining 60%
  • Silver – 30/70, 30% is your responsibility while your insurer pays 70%
  • Gold – 20/80, you pay 20% and your insurer covers 80%
  • Platinum – 10/90, your insurer pays 90% while you cover only 10%


How Copayments and Copays Work

As pointed out above, a copay is a predetermined amount that you have to pay for a covered service at the point of service, but coinsurance is the percentage of the total bill that you are responsible for. Both are some of the out-of-pocket costs of health insurance, but they function very differently. The difference between a copay and coinsurance can be broken down as follows:


  • Copayments are a set price you pay for services. You are responsible for the copays before and after you’ve met your deductible 
  • Coinsurance is a percentage of your medical bills you have. Coinsurance is only charged after you’ve met your deductible for the year.


What this means is that a $20 copay will always be $20. But your 20% coinsurance fee will vary with the price of the service. And these costs, as always, will vary depending on the plan you choose. In general, though, your copayments and coinsurance will be lower if you choose a plan with higher premiums.

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Copay and Coinsurance Example

To make things a little clearer, here’s a further example of how copays and coinsurance work: Let’s say your health insurance plan has a $3,000 deductible, $50 copays for specialists, 80/20 coinsurance, and a $6,000 out-of-pocket maximum on an individual plan (and you have no dependents covered by your plan). This $6,000 maximum means that once you pay that amount in covered medical expenses in a given year, your insurance company will begin to cover everything, and you will no longer have to pay coinsurance. 


Now let’s say you go in for your free annual checkup (a preventative service) and bring up the fact that your shoulder has been bothering you lately. Your primary care physician refers you to an orthopedic surgeon for further evaluation. When you see this specialist, you will pay your $50 copay at the point of service.


The consulted specialist suggests an MRI to evaluate your shoulder pain. The price of the MRI is $1,500, and since you haven’t met your deductible for the year, you will have to pay the whole bill for this test. The MRI finds that you have torn your rotator cuff and will require surgery to repair it. The price tag for this operation is $7,000. After spending $1,500 on the MRI, you will have to pay $1,500 more in order to meet your $3,000 deductible before your insurance will cover any of the surgical costs. That leaves $5,500 to pay for the surgery, and since you have an 80/20 plan, your 20% coinsurance payment would be $1,100. 


With meeting your deductible and paying your coinsurance and copayment, the total cost of repairing your torn rotator cuff would be $4,150. But remember, in this scenario, your plan has a $6,000 out-of-pocket maximum, which you would be close to meeting after this surgery.

What Should You Look for in a Plan?

Since everyone’s financial situations and requirements for health insurance vary, there is no one plan that will work for everyone. But when shopping for a plan, there are some considerations that can help narrow down your options.


For example, if you’re looking at a plan with lower monthly premiums, you’re most likely going to have a higher coinsurance percentage. Take two health care plans with different monthly premiums of $200 and $450 as an illustration. These two plans may have 30% and 20% coinsurance for ER visits, respectively. So, when looking at plans with lower premiums, you should always consider that your out-of-pocket expenses, including your coinsurance payments, might be higher.


And when it comes to the copayments included in the plans that you are looking at, keep in mind that copayments are typically not applied toward meeting deductibles. You should look into plans with lower copays if you anticipate spending a lot of money on prescription drugs. Or making multiple trips to the doctor each year.

In-Network vs Out-Of-Network

As mentioned above, some plans have different deductibles, copayments, and maximum out-of-pocket expenses if you see an in-network healthcare provider than if you see out-of-network providers. This is because doctors and hospitals that are part of your plan’s network have agreed to provide you with care at reduced costs. 


These reduced costs mean that it’s important to seek care from a provider who is part of your insurance’s network if at all possible. And when looking at plans, make sure your preferred doctors and hospitals are included in the plan’s network. If you find that you are frequently seeing out-of-network providers with the plan you have. You might want to make a change to your plan during the next Open Enrollment Period. Speak to an EZ agent about your options.


  • Does coinsurance apply before I meet my deductible?

No, it doesn’t. If you have a 20% coinsurance, they will only begin to cover their 80% after you’ve met your deductible.

  • Do all health insurance plans have copays and coinsurance?

No. You may not be required to pay a copayment for certain medical services with some plans. These plans, however, typically have higher monthly premiums. And there are also catastrophic health plans, for example, with very high deductibles and no coinsurance at all.

  • Are copays and coinsurance tax deductible?

If your out-of-pocket medical expenses exceed 7.5% of your AGI, you may be able to claim a tax deduction for all of your medical expenses. Including your copays and coinsurance. The excess of your healthcare costs over 7.5% of your adjusted gross income is tax deductible.

  • Do copayments and coinsurance count toward out-of-pocket maximums?

Your out-of-pocket maximum includes not only your deductible, but also any copays or coinsurance payments you may have made. Your regular premium payments don’t count toward your maximum.

  • Is it better to have a higher or lower coinsurance percentage included in your plan?

A lower coinsurance percentage means you’ll have to pay less out-of-pocket for covered medical services. But if you have a lower coinsurance percentage, you might have a higher deductible and premiums. 



When you are searching for a health insurance plan, the plan descriptions will always include the premiums (the amount you pay on a monthly basis to maintain the plan), deductibles, copays, coinsurance, and out-of-pocket maximums. Pay close attention to all of these costs, not just the plan’s premiums. So you can get a feel for the true amount you’ll be paying for your healthcare.


If you are generally healthy, a cheaper plan that has higher deductibles could work for you. However, if you expect to have significant healthcare costs, it may be worth it to pay higher monthly premiums for a plan that will cover more of those costs.

EZ Can Help

If you need help finding the right plan for you, EZ.Insure is here to help. We can quickly evaluate all of the health insurance plans in your area. Your personal agent will help you sort through the various plans available to you. And explain all of the costs that come with each one. And the best part is that all of our services are completely free! To get your free quotes, simply enter your zip code in the box below, or give us a call at 877-670-3557.

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Your Guide to Healthcare Options During Open Enrollment

The health insurance Open Enrollment Period (OEP) is here, and you might be feeling a little overwhelmed. Sifting through all the different health insurance options available to you in your region can be tricky, but you know you and your family need to have health insurance to be protected. Don’t worry, though, if you work with a knowledgeable EZ agent, you’ll be able to find an affordable plan that will give you exactly what you’re looking for. Before you do that, we’re going to give you some guidance on how to start looking for the right plan for you.

What Is Open Enrollment?feet with 3 arrows

The Open Enrollment Period (OEP) is the one time during the year when you can change, cancel, or purchase a new health insurance plan. Depending on what state you live in, it begins on November 1st and lasts until mid-to-late January. It is the perfect time to assess your current health insurance plan, check if it’s going to change in the new year, and decide if it will fit your future needs or if it’s time to get a new plan.

Terms You Need to Know

If you’re looking at plans, you will come across some terms that might be unfamiliar to you, or that maybe you’ve never fully understood. To get a full understanding of your options, you should feel comfortable with the following terms::

  • Premium– The amount you need to pay per month to keep your health insurance plan active. 
  • Deductible– The amount you will need to pay for healthcare services before your health insurance kicks in and pays the rest of your bills. For example, if you have a $2,000 deductible, you will have to pay that amount in medical bills before your plan covers your healthcare expenses.
  • Network- A group of hospitals, doctors, and other healthcare professionals that are covered by your plan.
  • Copay– A set amount you will pay when you see a healthcare professional. For example, you might have to pay $20 every time you see your primary care doctor and $30 when you see a specialist.
  • Coinsurance– The percentage you’ll pay for healthcare services after you meet your deductible. For example, you might have to pay 20% of a covered service, so if a procedure costs $200, you’ll pay $40.
  • Out-of-pocket maximum- The most you will pay out-of-pocket per year for your healthcare. Typically this will include your copays, coinsurance, and deductible.
  • High-deductible health plan (HDHP)- A type of plan that has a high deductible and lower premium. You can also get a health savings account (HSA) alongside a HDHP that allows you to set aside pre-tax dollars towards qualified medical expenses. These types of plans are typically best for people who are healthy and do not see the doctor often.
  • Exclusion- What your plan will not cover – for example, cosmetic surgery.

Choosing A Plan

When trying to select the right health insurance plan for you and your family, you will come across many different choices. The right one for you will depend on your lifestyle, the doctors you want to see, and any medical equipment you need or medications that you take regularly. You should also take into consideration if you have children, especially if they play sports and might need to go to the emergency room.

You will also need to think about any possible changes in your life in the upcoming year. For example, will you be starting a family, getting married, going through a divorce, or any other life-changing event that will affect how much health insurance you need? Any of these events will mean you’ll need to reconsider your coverage.

person with a tablet and gears next to it

In addition, you should look carefully at the different types of plans available, including HMOs and PPOs. With an HMO, you will get lower premiums, but you will be limited to a restricted network. PPOs, or preferred provider organizations, on the other hand, have a larger network. You will also have different metal tears to choose from which offer a range of coverage options and price points. Generally, the difference between the tiers lies in what percentage of your expenses the plan covers. 

Last but not least, you should look into subsidies that you might qualify for, especially now that they have been extended through the American Rescue Plan Act. You may now qualify for subsidies that you might not have qualified for a year or two ago. This is why it’s very important to work with a knowledgeable agent who can go over all of your needs to make sure you find the perfect plan for you and your family. 

Need Help?

Comparing plans is the best way to find an affordable plan that provides the right level of coverage for you. Before you start doing the work of comparing on your own, come to EZ. We will make the process quicker and easier by comparing available plans in your area in minutes. Our licensed agents work with all the top-rated insurance companies in the nation and can go over your budget and needs, and find the best plan for you and your family. We compare plans and offer guidance at no cost to you. To get free quotes, simply enter your zip code in the bar above, or to speak directly with an agent, call 888-350-1890.

The A-Z of Basic Health Insurance Terminology

Diving into the world of health insurance can be intimidating. It’s easy to get overwhelmed when you’re looking for a plan because of all of the jargon and terminology that you need to become familiar with. But knowing what everything means as you research plans will help you to determine which one is best for you and your family, and will ensure you get the best coverage at the best price. Whether this is your first time buying health insurance or not, knowing the following health insurance terminology will help you make a more informed decision.

invoice letter sticking out of an envelope
Actual charge is the dollar amount that is charged by a doctor for a particular medical service. 

Actual Charge

This is the dollar amount that is charged by a doctor or other healthcare provider for a particular medical service or treatment. 


A person that is trained in the mathematical and statistical aspects of the insurance industry. They are the ones who calculate premium rates and assist in estimating the costs and savings of your health insurance plan.

Allowed Amount

Also sometimes called an eligible expense, a payment allowance, or negotiated rates, an allowed amount is the amount that your insurance company is willing to pay for a covered healthcare service. If your provider charges more than the allowed amount, you might have to pay the difference. 

Balance Billing

This is a bill for the amount that you owe for a particular service after insurance has paid its share – in other words, the difference between the actual charge and the allowed amount. For example, if your provider charges you $200 for a service, and the allowed amount is $100, your provider will most likely bill you for the remaining $100. 


This is your share of the cost of a covered healthcare service, calculated as a percent of the allowed amount for the service. You generally have to pay the coinsurance plus any deductible that you owe. For example, if your health insurance plan’s allowed amount is $100 for an office visit and you’ve met your deductible, your coinsurance payment of 20% would be $20 for the visit.

Co-payman's hand holding a blue credit card

This is a fixed amount you pay for covered health care services, such as visits to your doctor, specialists, or any other health care professional. Your co-pay will vary depending on the type of covered healthcare service you receive: visits to a primary care physician, specialist, and the emergency room will all be priced differently.


This is the amount you have to pay each year in medical expenses before your health insurance will kick in and begin to cover the rest of the year’s medical expenses. For example, if your deductible is $2,000,  your plan will not pay anything until you have met your $2,000 deductible for covered healthcare services. 

Drug Formulary

A list of prescription medications that are selected for coverage under a health insurance plan. Prescription drugs can be included on a drug formulary based on their efficacy, safety, and cost-effectiveness. Some plans will place medications on different tiers, which will change the price of the medications. Some health insurance plans may require that patients obtain preauthorization before non-formulary drugs are covered.

Durable Medical Equipment

If you need any medical equipment, such as crutches, oxygen apparatus, wheelchairs, or even blood testing strips for diabetes, your health insurance plan will most likely cover the cost of these things up to a certain point. Generally, you will have to pay coinsurance for any durable medical equipment that you receive. 

High Deductible Health Plan (HDHP)

This type of plan has lower monthly premiums, but a high annual deductible. These plans are generally aimed at people who are healthy and do not go to the doctor often, and so do not expect to have to meet the high deductible. 

In-Network Vs Out-of-Network

netword of people with lines connecting them
Your plan will have a network of healthcare providers, if you see any doctors that are not in your network, you might have to pay out of pocket.

If a healthcare provider is in-network, that means your health insurance plan will cover services provided by them. These are very important terms to know, because if you seek services from a healthcare professional who is considered out-of-network by your plan, you might have to pay for the service completely out-of-pocket. 

Out-of-pocket Limit

This is the most that you will have to pay for medical services during a policy period, which is usually a calendar year. Your premiums and most other medical expenses paid out-of-pocket will count towards your limit, but you should be aware that some plans will not count co-payments, deductibles, or coinsurance, so it’s important to check your policy. 


The amount that you will pay for health insurance every month. Your premium does not include any other expenses. If you do not pay your premium, you will lose your health insurance coverage. 


A healthcare professional that specializes in a certain condition or area of the body. Specialists include gastrologists, dermatologists, and podiatrists, for example. Seeing a specialist will cost more than seeing your primary care physician, so your co-pays and actual charges will be higher. 

UCR (Usual, Customary, and Reasonable)

This is the amount charged for a medical service within a specific geographic area, based on what providers in the area usually charge for the same or similar medical service.

The best way to understand how health insurance works, and to find the right plan for you and your family’s specific needs, is by working with an agent who specializes in health insurance. EZ can help: we offer a wide range of health insurance plans from top-rated insurance companies in every state. And because we work with so many companies and can offer all of the plans available in your area, we can find you a plan that saves you a lot of money – even hundreds of dollars – even if you don’t qualify for a subsidy. There is no obligation, or hassle, just free quotes on all available plans in your area. To get free instant quotes, simply enter your zip code in the bar above, or to speak to a local agent, call 888-350-1890.

Coinsurance Clause? Agreed Value? Make Sure You Have Enough Commercial Property Insurance!

Having enough commercial property insurance coverage is crucial to protecting your business. Whether you’re choosing to insure the actual cash value (ACV) or the replacement value of your real property (your building) and business personal property (everything in it), you need to purchase a policy that will cover as much as possible in case disaster strikes. One major storm, one act of vandalism, or one kitchen fire can mean thousands of dollars in repairs, and could even mean closing your doors forever.

There is another reason, though, that you need to purchase the right amount of coverage: your insurance company might actually require you to have a certain amount. Check your policy for what is known as a coinsurance clause, and make sure that you’re meeting your insurance company’s requirements, otherwise you could end up paying for damages to your business out-of-pocket.

What Is Coinsurance?

caucasian hands pointing at a piece of paper that says "insurance policy" on it
Make sure to read your commercial insurance policy to see if you are required to pay a coinsurance clause.

Your commercial property insurance can feel like another expense in a very long list of expenses that pile up every month. It might be tempting to cut your premium by skimping on coverage – after all, what are the odds that you’ll be forced to make a claim? Well, commercial property insurance claims are more common than you might think, and more costly than you might think, as well. That means that, if you’re covered by a commercial property insurance policy, your insurance company will have to lay out a lot of cash in the event that you do make a claim. It also means that your insurance company needs you (and every other business with a policy) to pay enough in premiums to keep them afloat. 

One way that insurance companies make sure that you’re paying enough in premiums is by adding a coinsurance clause to your policy. You may be familiar with this term as it relates to health insurance, but it works a little bit differently in a commercial property insurance policy. If you have a coinsurance requirement in your health insurance plan, it means that your insurance company pays a certain percentage of the bill, and you pay the rest. If you have a coinsurance clause in your commercial property policy, it means that you need to purchase a policy with a certain policy limit, or maximum amount that your insurance company will pay for a claim. 

For example, your insurance company might write an 80% coinsurance clause into your policy. This would mean that you would need to purchase enough insurance to cover 80% of the value of your property. So, if you were insuring a building that would cost $1 million to replace, you would have to purchase at least $800,000 in coverage. 

How Coinsurance Works

Coinsurance clauses encourage business owners to purchase enough insurance to make sure that any possible claims are fully covered, and to make sure that insurance companies collect enough premium dollars to keep rates fair for everybody. Not every policy will have a coinsurance clause – check your policy conditions to see if yours has one. If you do have a coinsurance clause, it won’t have any effect on your policy unless you experience a loss that requires you to make a claim. If you make a claim, and you haven’t fulfilled your coinsurance requirements, then you could face a penalty.

If you need to make a claim for damages, your insurance company will compare the insurance limit on your policy to the amount of insurance you were required to purchase based on your coinsurance clause. If you purchased less than you were required to, your insurance company might reduce your claim payment in proportion to the difference. For example, if you purchased 10% less than required, your insurance company might pay 10% less than they would if you had purchased adequate coverage.

2 pie charts with the 80-20 rule. an arrow is pointing the 20% towards the other pie chart labeled 80%

For example, let’s say that you have an office that is valued at $100,000, and you have a 80% coinsurance clause in your property insurance. You would have to insure your office for at least $80,000. But let’s also say that you’ve only insured it for $40,000, 50% less than you were required to. There is a fire in your office that causes $20,000 in damages – but because you insured your property for 50% less than you were supposed to, your insurance company will now only pay 50% of the claim, or $10,000. You can see why it’s important to pay attention to your coinsurance requirements!

One other very important thing to note: your insurance company will decide whether you have met your coinsurance requirements based on what your property is worth at the time that the damage occurs. So, if your property has increased in value, and you haven’t purchased more coverage, then you could be hit with a penalty.

Avoiding a Coinsurance Clause

illustration of black hands shaking with a black and white suit on the arms
if you want to avoid the coinsurance clause, then you will have to buy agreed value coverage.

One way to avoid a coinsurance clause is to purchase agreed value coverage. An agreed value clause is added to a policy when you and your insurance company agree on the insurable value of your property. In order to reach this agreement, you need to submit a statement of values to your insurer before your policy begins. This statement of values will list everything you are insuring and its value.

Once you have provided a statement of values to your insurer, they will waive your coinsurance penalty for one year (the term of your policy). If you end up making a claim for damages, your property will be assessed based on the agreed-upon value as long as you have insured your property for that amount.

Getting the right commercial property insurance policy is one of the most important things you need to do for your business. Being underinsured can spell big trouble, because you could be hit with a coinsurance penalty by your insurance companies. Always make sure that your policy is keeping up with your growing business, and always make sure to go through your insurance conditions with a fine tooth comb. If you need help with either of those things, talk to EZ. Our knowledgeable agents can answer all of your commercial insurance-related questions, find you great policies, and keep them all up-to-date – and we’ll do it all for free! To get started with us, simply enter your zip code in the bar above, or you can speak to an agent by calling 888-615-4893.

Out-of-Pocket Maximum Explained

Medical bills can be a huge source of stress. They can seem like they are never ending, but there is actually a limit on how much you can spend on out-of-pocket healthcare costs. The out-of-pocket maximum, which is the annual limit that you are required to pay for covered health services, is your financial saving grace. Each health insurance plan has different out-of-pocket maximums. Understanding yours will help you get a better handle on how much you will be paying out-of-pocket with your policy. 

What Is an Out-of-Pocket Maximum?caucasian mans hand pointing at the end of a br that says maximum

An out-of-pocket maximum is the amount that you will have to pay for covered health services. Once you reach that amount, your insurance will pay for all covered services. All copayments, deductibles, and coinsurance count towards your out-of-pocket maximum. However, your  monthly premium payments do not go towards your out-of-pocket maximum. 

How It Works

If you need a medical procedure, generally you and your  insurance company will each pay a portion of the cost. You will pay enough to meet your annual deductible, and your insurance company will pay for the rest of the procedure, unless you have to pay coinsurance as part of your policy. If your plan does require you to pay coinsurance then you will also have to pay 20% (usually) of the cost of the procedure, even after meeting your deductible.

After you have met your deductible, you will continue to pay copays and coinsurance until you meet your out-of-pocket maximum. After you meet your maximum, insurance will then pay 100% of any medical costs. You will not have to pay for copays or coinsurance after meeting your maximum. 

calculator on paper with a pen sitting on top of it in the paper.
After you have met your deductible, you will continue to pay copays and coinsurance until you meet your out-of-pocket maximum.

Here’s an example to illustrate how out-of-pocket maximums work. Let’s say Mary has a health insurance plan with a $2,000 deductible, a 20% coinsurance requirement for all care after meeting the deductible, and a $5,000 out-of-pocket maximum. She has to have surgery and the total hospital bill is $20,000. The costs will break down like this:

  • Mary will pay her $2,000 deductible, leaving $18,000 of the bill. 
  • Her coinsurance requirement is 20% of the $18,000, which is $5400. But because Mary’s plan has an out-of-pocket maximum, she and her insurance company will end up each paying part of this cost.
  • Mary has already paid $2,000 to meet her deductible, and her out-of-pocket maximum is $5,000 so instead of owing $5,400 in coinsurance payments, she only owes $3,000 ($2,000 deductible + $3,000 coinsurance = $5,000 maximum out-of-pocket payment). 
  • Her insurance company will now cover the remaining $13,000 of the cost of the procedure.

Do All Plans Have a Maximum?

All plans that meet ACA standards have out-of-pocket maximums. For 2020, that number is $8,2000 for individuals and $16,400 for families. Some plans may have a lower maximum, but none will be higher than those amounts. Plans with higher monthly premiums generally have lower out-of-pocket maximums, while plans with  lower monthly premium plans, like  catastrophic or high-deductible health plans, have higher out-of-pocket maximums. 

In order to find the right plan for your needs and budget, you have to take into account everything that it has to offer, including things like out-of-pocket maximums. Doing all the research alone is time-consuming and can cause confusion and missed opportunities. EZ will make the process quick and painless; we’ll explain everything clearly, give you real-world examples of how the plan would work for you, compare quotes, and calculate costs for you. We will set you up with one agent that will help you find the right plan for your medical and financial needs. To start saving, enter your zip code in the bar above, or to speak to one of our licensed agents, call 888-350-1890.

Your 2020 Coinsurance Guide

Once you sign up for a health insurance plan, you are immediately expected to start monthly premium payments. Then, if you incur medical expenses such as lab work, you are expected to pay these expenses, contributing to your ‘deductible.’ A deductible is an amount you have to pay before your insurance starts paying a percentage. Then, once you are finally all caught up with your deductible, your insurance policy covers the rest of your claims, right? Well, kind of, unless your policy has a coinsurance clause. 

Once your deductible is met, any insurance-covered procedure, treatment or service will result in a medical expense. This is called coinsurance. Your insurance company will pay a large portion of any bill (after your deductible is met), and you are responsible for the rest. There are different breakdowns for how the coinsurance is paid for.

Coinsurance is a great option for people needing a little extra help.

How It Breaks Down

The divisions in coinsurance policies are usually broken down into 70/30 or 80/20. What this means is the insurance company will pay 70% or 80%, and you will pay the remaining 30% or 20% out of pocket. The most common coinsurance breakdown is 80/20.

This will only apply once your deductible is met. If you have a $1500 deductible, then you must pay this off first before activating the coinsurance.

Now, let’s use an example. If your medical bill is $2,000 and you have a $1,000 deductible, then the portion of the bill that the coinsurance will apply to is $1,000. With a 20% coinsurance, you will pay $200 extra. In total, the $1,000 deductible plus the $200 remaining of the coinsurance will equate to $1,200 out of pocket. 

Now if your deductible was already met and you had that same procedure that was $2,000, then you would have to pay 20% of it. The sum total of $400 out of pocket, since the insurance company paid $1,600 of the service.

Out-of-Pocket Maximum

Now, to throw a wrench into things, health insurance companies offer plans with an out of pocket maximum- but this will work in your favor if you have coinsurance. Once you reach your out of pocket maximum, then the insurance company will pay for any following services 100%. 

For example, if you have a $5,000 out of pocket maximum, then the $1,000 deductible you paid goes towards that. This leaves you with only $4000 left to pay. Every 20% or 30% you pay in coinsurance goes towards your out of pocket maximum. 

If you have surgery that costs $20,000, then you will have to pay a 20% coinsurance of $4,000. Once you pay that off, including the previous $1,000 deductible, then you can not be charged for anything further out of pocket. The out of pocket max will have been satisfied and the insurance company must pay any following services fully.

money saved from using coinsurance
Think of the money you’ll save by using this insurance method–paying completely alone could be devastating.

Because policies are renewed annually, once the new year begins, then your deductible restarts, and you will have to meet that price again. Some people have to deal with coinsurance, while others just have to pay their deductible and the insurance company will pay the rest.

In order to find a plan that meets your budget, and needs, speaking with an agent will help. They can help guide you in the best direction, and explain to you thoroughly how much everything will be. You can discuss with them coinsurance, and if you would like a plan that has one or doesn’t. To speak to one of our highly trained agents in your area call 888-350-1890, or email us at Or to get instant quotes, enter your zip code in the bar above. Health insurance has so many different variables. Let us make it more simple and easy for you.