Copay vs. coinsurance.
In plain English
Copays are predictable: $30 for the doctor, $10 for the generic. Coinsurance is proportional: after the deductible, you pay your percentage of the plan's allowed amount and the insurer pays the rest. A plan described as "80/20" means the insurer pays 80%, you pay 20%, until you hit your out-of-pocket max.
01Why it matters
It's the difference between a bill you can predict and one that scales with the procedure, which matters most for big, planned care.
02The math, step by step
A procedure has a $5,000 allowed amount, your deductible is met, and your coinsurance is 20%. You owe $1,000 (the allowed amount times your percentage). With a $50 specialist copay structure instead, you'd owe $50.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
Coinsurance is not calculated on the hospital's sticker price. It's calculated on the insurer's negotiated allowed amount, which is usually far lower.
Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice