How does a copayment differ from coinsurance?

A copayment is a fixed dollar amount that an insured individual pays for a specific service or medication at the time of receiving care. For example, a patient might pay a $25 copayment for a doctor's visit. This amount is predetermined and does not fluctuate based on the total cost of the service.

Coinsurance, on the other hand, is a percentage of the total cost of a service that the insured pays after their deductible has been met. For instance, if a patient has a coinsurance rate of 20%, and they receive a treatment that costs $100, they would pay $20 while the insurance covers the remaining $80. This means that the amount the patient pays can vary based on the total cost of the service.

Therefore, the distinguishing feature is that a copayment is a fixed dollar amount for each visit or service, while coinsurance is calculated as a percentage of the total cost of the service. This distinction clarifies their roles in health care pricing and patient out-of-pocket expenses.