How does coinsurance differ from copayment?

Coinsurance is a cost-sharing arrangement where the insured pays a certain percentage of the covered healthcare expenses after the deductible has been satisfied. This means that if your plan has a 20% coinsurance, you will be responsible for 20% of the costs of the services rendered, while the insurance company pays the remaining 80%. It kicks in after you’ve met your annual deductible, ensuring that the insured shares the risk of high medical expenses.

In contrast, a copayment (or copay) is typically a fixed dollar amount that is due at the time of receiving a healthcare service, like a doctor's visit or prescription. The copayment does not depend on the total cost of the service and is paid regardless of whether a deductible has been met or not.

This distinction is crucial for understanding how different types of cost-sharing mechanisms work in health insurance plans, and it emphasizes the difference in timing and calculation between the two concepts.