What is the difference between coinsurance and co-payment?
On occasion, these terms have been used interchangeably. However, it is preferable to define the two terms differently, despite their similarity of purpose. Under a co-payment or co-pay provision, the insured usually is required to pay a set or fixed dollar amount (e.g., $3, $5, or $10) each time a particular medical service is used. Co-pay provisions are frequently found in medical plans offered by health maintenance organizations (HMOs) where a nominal co-payment is applied to each office visit and to each prescription that is filled.
Coinsurance refers to cost share. For example, after the calendar year deductible has been paid under a major medical plan, the company and the insured share payment of a specific dollar amount of expenses, say $5,000. If the coinsurance is 80/20%, the company agrees to pay 80% and the insured agrees to pay 20%. In the case of the aforementioned $5,000 the insurance company would pay $4,000 (80% of $5,000 ) and the insured could pay $1,000 ( 20% of $5,000 ). Co-payment, on the other hand, refers to the small up front charge paid by the insured before benefits are accessed. For example, there may be a $5 co-pay for prescriptions or a $10 co-pay for office visits. Generally speaking, after the co-pay has been satisfied, the balance of the expense is picked up by the insurance or other health care carrier.
On occasion, these terms have been used interchangeably. However, it is preferable to define the two terms differently, despite their similarity of purpose. Under a co-payment or co-pay provision, the insured usually is required to pay a set or fixed dollar amount (e.g., $3, $5, or $10) each time a particular medical service is used. Co-pay provisions are frequently found in medical plans offered by health maintenance organizations (HMOs) where a nominal co-payment is applied to each office visit and to each prescription that is filled. What is a preexisting conditions clause and what is the effect of its inclusion in major medical expense plans? A preexisting condition is often defined as a medical condition (i.e., an injury or illness) that required treatment during a prescribed period of time, e.g., 3 or 6 months, prior to the insured’s effective date of coverage under the major medical expense plan. Sometimes, a preexisting condition is defined to include medical conditions that we
On occasion, these terms have been used interchangeably. However, it is preferable to define the two terms differently, despite their similarity of purpose. Under a CO-payment or co-pay provision, the insured usually is required to pay a set or fixed dollar amount (e.g., $10, $15, or $20) each time a particular medical service is used. Co-pay provisions are frequently found in medical plans offered by health maintenance organizations (HMOs) where a nominal CO-payment is applied to each office visit and to each prescription that is filled.
