You may be paying a premium for health insurance, but there are additional expenses that you’re still responsible for. You have cost sharing with the insurance company.
The amount you pay depends on the kind of plan you have. Typically, the higher the premium, the less cost sharing you have. But how does this cost sharing break down?
Copays Are a Flat Rate
A copayment or copay is a flat rate you are charged each time you go to the doctor or fill a prescription. It is paid at the time of service.
Copays are typically different for general practitioners and specialists. For example, you may have a $25 copay for your primary physician and a $50 copayment for your pulmonologist. Any specialist will have that $50 copay. Your health insurance covers the remaining costs of the visit. And the copay is typically paid at the time of service.
The amount of your copay depends on the plan, price, and company you have chosen. Higher monthly premiums have lower copays than those that pay lower premiums. So, you'll want to be aware of that when comparing insurance policies.
Because copays are flat rates, it is not necessary to calculate your copay costs. Copays are usually printed on your health plan ID.
Paying Beyond Copays at the Doctor
Have you ever paid your copay at the doctor’s and then been billed later for an additional amount? That’s because coinsurance will likely apply to your visit to the doctor after the insurance has been processed, even if you’ve paid the copay.
There’s always the possibility of the deductible factoring in as well if items such as X-rays or bloodwork were taken during your visit.
These charges are part of your insurance plan. The health care provider or facility has no control over them.
It’s essential to be aware of them when purchasing a plan or when estimating your health care costs.
How Does a Deductible Work?
A deductible is the specified sum of money that you are responsible for before your insurance pays. It goes toward eligible medical expenses that are in-network.
For example, if your yearly deductible is $2,500, you must pay the first $2,500 of your medical expenses. So, if your medical expenses are $1,000, you must pay that $1,000. You will then have $1,500 left on your deductible to pay. Once you have paid expenses equal to the deductible, in this case, $2,500, the insurance will start paying the medical expenses.
A deductible is for one policy year and starts over again once the new policy year begins. It is also separate from your premium. Despite having met your deductible, you must still pay your monthly premium.
Individuals have different deductibles than families. For example, the lowest deductible for an individual in 2025 is $1,650, while a family has a $3,300 deductible. But deductibles can go higher depending on your plan and premium.
Although once you meet your deductible, the insurance pays, you still are responsible for copays and possible coinsurance charges.
Coinsurance Pays a Portion of Costs
Coinsurance is a portion of your medical expenses after your deductible is met. For many, this is the most confusing part of health insurance. This goes back to “cost sharing” mentioned previously.
Coinsurance means that you and your insurance carrier each pay a portion of the costs. For example, if you have paid your $2,500 deductible and your medical expense is $6,000, your health insurance begins to pay that final $3,500.
A coinsurance is nothing more than a percentage of the remaining $3,500 or dollar amount after your deductible is met. So, if your coinsurance is 20 percent, you will pay 20 percent of that remaining $3,500 medical expense. Your portion will be $700.
If you have a 20 percent coinsurance on your plan, you will see it listed as an 80/20 coinsurance. If it’s a 30 percent coinsurance, you will see it as 70/30. The insurers’ portion is listed first.
It’s important to pay attention to this number when calculating your health costs.
Understanding Out-of-Pocket Maximum
Typically, an out-of-pocket maximum is the most you have to pay per year for covered health care costs. Once you have reached your out-of-pocket maximum, the insurance company will pay 100 percent of your covered medical expenses.
Copays, deductibles, and coinsurance all count toward your yearly out-of-pocket maximum costs. This doesn’t include your premium, services your plan doesn’t cover, out-of-network care and services, and costs above the allowed amount a provider may charge.
The out-of-pocket maximum starts over each policy year.
Plan Your Health Insurance Budget
It’s essential to compare copays, deductibles, and coinsurance when choosing an insurance plan. But it’s also important to keep an eye on your health care budget by monitoring these expenses.
By knowing your deductible and coinsurance, you can avoid surprises.
The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
