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Deductibles, copays and coinsurance are a few factors that determine how a health insurance policy works. More specifically, these facets determine how costs are divided by the insurance company and the insurer. Let’s dive deeper into what deductibles, copays, and coinsurance are, along with some differences between them.
What are deductibles, copays, and coinsurance?
Let’s define how deductibles, copays, and coinsurance work in a traditional health insurance policy:
Deductibles
A deductible is a certain dollar amount the policyholder must pay before health insurance benefits kick in.1 Deductibles can be up to $7,050 for individual coverage, depending on the plan you choose.2
Copays
A copay is a set dollar amount that the policyholder agrees to pay for various kinds of care and treatment—like doctor visits, preventative care, and prescriptions.3
Coinsurance
Coinsurance is the percentage a policyholder pays for health services after the deductible has been met.4
Sometimes, how deductibles, copays, and coinsurance are structured can leave policyholders with thousands of dollars expected to be paid out-of-pocket. Aflac doesn’t offer primary health insurance plans, but we do provide supplemental coverage to work with your primary plan to help pay outstanding costs, like deductibles, copays and coinsurance.
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Deductibles vs. Copays
There are a handful of differences between copays and deductibles. As we learned earlier, a deductible is a pre-determined value that must be met before any policy benefits become available. Deductibles can fall somewhere in the hundreds or thousands of dollars.
On the other hand, copays typically start at $10 and apply to your health services. These fees remain static regardless of if you’ve met the deductible or not. Copays can help make office visits, preventative care and other healthcare more affordable compared to paying completely out-of-pocket without any health insurance.5
Copays vs. Coinsurance
The difference between copays and coinsurance is how the policyholder agrees to pay for a portion of services. As we discussed earlier, copays relate to the specific dollar amount, while coinsurance relates to the decided payment percentage.
Copay structures are determined by the type of healthcare you receive and apply, even if you haven’t met your deductible.6 For example, the copay may be lower for preventative care than for an urgent care visit. On the other hand, coinsurance can be broader and only applies after you’ve met the deductible.7
The cost breakdown for coinsurance could look like having you pay 20% of services while your insurance company pays the other 80%. This payment structure only applies until you meet your maximum out-of-pocket limit.8 If you reach this value, your health insurance company will pay for any remaining treatments within the coverage year. It’s important not to confuse your deductible with the maximum out-of-pocket limit.
Deductibles vs. Coinsurance
The difference between deductibles and coinsurance is related to when payments are due and how they accumulate. Coinsurance benefits only kick in after the deductible has been paid in full.9 Until then, policyholders can still get financial assistance through copays. Deductibles are paid down steadily as soon as the plan is active.
Get Added Support with Aflac Supplemental Insurance
When figuring out how much you’ll pay for healthcare, it’s important to understand how deductibles, copays, and coinsurance work. Now that you know the differences between these types of costs, you may determine where there are potential areas for greater coverage in your existing health insurance plan. Luckily, Aflac offers a variety of specific supplemental insurance plans to help offset those costs.
We offer supplemental insurance plans for vision, hospital, cancer, accident, short-term disability, and critical illness care. Whether you know the specific healthcare category you need better support in or are unsure of what kind of supplemental coverage to get, we recommend chatting with an agent today to see how Aflac can help make your care more affordable.
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Disclaimer
1, 3-8 Investopedia - Coinsurance vs Copays/ What’s the Difference. Updated December 16, 2023. https://www.investopedia.com/articles/insurance/120816/coinsurance-vs-copay-why-you-need-know-difference.asp. Accessed February 21, 2024.
2 Forbes - What Is a Health Insurance Deductible. Updated July 27, 2022. https://www.forbes.com/advisor/health-insurance/what-is-a-health-insurance-deductible/. Accessed February 21, 2024.
Coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York.
In Delaware, Policy VSN100. In Idaho, Policy VSN100ID. In Oklahoma, Policy VSN100OKR. In Virginia, Policy VSN100VA. Hospital: In Delaware, Policies B40100DE & B4010HDE. In Idaho, Policies B40100ID & B4010HID. In Virginia, Policies B40100VA & B4010HVA. Cancer/Specified-Disease: In Delaware, Policies B70100DE, B70200DE & B70300DE. Policy A72200. In Idaho, Policies B70100ID, B70200ID, B70300ID, B7010EPID, B7020EPID. Policy A72200ID. In Oklahoma, Policies B70100OK, B70200OK, B70300OK, B7010EPOK, B7020EPOK. Policy A72200OK. In Virginia, policies A75100VA–A75300VA. Accident: In Delaware, Policies A36100DE—A36400DE, & A363OFDE. Policy A371AA & A371BA. In Idaho, Policies A36100ID–A36400ID, & A363OFID. Policy A37000ID.In Virginia, Policies A36100VA – A36400VA, & A363OFVA. Policies A371AAVA & A371BAVA. Short-Term Disability: In Delaware, Policies A57600DE & A57600LB. In Idaho, Policy A57600IDR. In Oklahoma, Policies A57600OK & A57600LBOK. In Virginia, Policies A57600VA & A57600LBVA. Critical Illness: In Delaware, Policies A74100DE, A74200DE, A74300DE. Policies B71100, B71200, B7130H & B7140H. Policies A71100DE & A71200DE. In Idaho, Policies A74100ID, A74200ID, A74300ID. In Oklahoma, Policies A74100OK, A74200OK, A74300OK. Policies A73100OK & A7310HOK. Policies B71100OK & B7110HOK. Policies A71100OK & A71200OK. In Virginia, Policies A74100VA, A74200VA, A74300VA. Policy A73100VA. Policies A71100VA & A71200VA.
Coverage underwritten by Tier One Insurance Company: Dental, Vision and Hearing: In Delaware, Policy T80000. In Idaho, Policy T80000ID. In Oklahoma, Policy T80000OK. Dental claims are administered by Aflac Benefits Solutions, Inc. Vision claims are administered by EyeMed Vision Care, LLC. Hearing claims are administered by Nations Hearing. NOTICE: The coverage offered is not a qualified health plan (QHP) under the Patient Protection and Affordable Care Act (ACA) and is not required to satisfy essential health benefits mandates of the ACA. The coverage provides limited benefits. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908). Cancer/Specified-Disease: In Delaware, Policy T70000. In Idaho, Policy T70000ID. In Oklahoma, Policy T70000OK. In Virginia, policies T70000VA & T70000GVA. Accident: In Delaware, Policy T37000. In Idaho, Policies T37100ID, T37200ID, & T37300ID. In Oklahoma, Policy T37000OK. Critical Illness: In Delaware, Policy T71000. In Oklahoma, Policy T71000OK. In Virginia, Policy T71100VA.
Aflac WWHQ | Tier One Insurance Company | 1932 Wynnton Road | Columbus, GA 31999
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