Because the average treatment cost for senior citizens is higher, this clause is more popular in insurance policies.The feature is popular in metropolitan cities where the average cost of treatment and the disposable income of individuals are higher.Here are the features of copay that you need to understand. Features of Out-of-the-Pocket Health Insurance ExpensesĪre you wondering, “how does health insurance deductible work?” To illustrate how copay and coinsurance works, we have compiled the features for you. As an employee, the healthcare premium would be deducted from your paycheck. Mostly, you pay a health insurance premium at a monthly or biweekly interval and it may include a high-deductible. What is an Insurance Premium?Ī health insurance premium is the recurring payments you make to manage your health insurance plan. If some of your expenses are not eligible for cover under the policy, you have to pay the entire bill yourself, otherwise known as 100 coinsurance. Note : Always check for the list of the covered services. However, the company calculates this amount after you pay your deductibles, referred to as coinsurance after deductible. The insurance company will cover the remaining 90% of the total expenses.

If the coinsurance clause in your insurance policy states a 10% fixed percentage, you’ll bear 10% of the treatment expenses. Coinsurance is identical to the copayment clause under health insurance. It is usually defined as a fixed percentage or amount, called coinsurance after deductible. What is Coinsurance?Ĭoinsurance is the percentage of medical treatment expenses you would incur after you pay the deductibles. The company will only activate the health insurance policy after you pay USD 3,000 toward deductibles per the clause. If you have a deductibles clause stating an amount of USD 3,000, you will have to pay it upfront.

Note: If you have a high-deductible health plan, you may be eligible to set aside money in a tax-advantaged Health Savings Account. Deductibles can be an annual contribution or may vary for each treatment. You have to pay the amount upfront, post which your insurance plan will contribute to your medical expenses. In such an example, the policyholder will have to pay 1,500 USD of the total amount while the insurer will handle the remaining 8,500 USD.Ĭonsider deductible a flat fee levied each year on most eligible medical services or medications. Say 15% is the agreed amount, and USD 10,000 is the total treatment expenses. In a percentage clause, the policyholder has to pay in percentage of the total treatment cost.

The insurer will cover the rest of your medical treatment. In a fixed amount clause, the policyholder pays a fixed amount, say USD 5000, irrespective of the total treatment cost. Example of Fixed Amount and Fixed Percentage Copay The policyholder must give the fixed amount or percentage, while the insurer pays the remaining amount. Further, the clause may include a condition of a fixed amount or fixed percentage. 12 Deductible vs Copay: The Final Answer What is Copay?īoth the insurer and insured share the expenses of medical treatment when an insurance policy has a copay clause.

Copay vs deductible