Co-what? Understanding Your Copay and Coinsurance

Copay? Coinsurance? What’s the difference? Insurance terms can be real headscratchers.

Knowing the difference between a copay and coinsurance can help you determine which plan has the right coverage for you and your mental health care needs. 

What’s a copay?

A copay is a flat fee, not a percentage. Your copay may vary based on service; however, it will always be consistent for the same service — no matter how much the rest of your bill is.

A copay is due at the time of service. In most cases, your copay will not apply towards your yearly deductible. And you will always owe the copay amount unless you hit your out-of-pocket maximum for the year.  After hitting your out-of-pocket maximum, insurance will cover 100% of the costs of your covered benefits.

Example: Sam’s copay for a therapy session is $25. Their out-of-pocket maximum is $500. Every time they complete a therapy session, they will be charged $25 until they hit $500. After that, they will not have to pay for their therapy sessions for the rest of the year.

What’s coinsurance?

Coinsurance is a percentage of your bill, not a flat fee. In most insurance plans, you do not pay coinsurance until after you’ve met your yearly deductible.

Once you hit your deductible, you will be responsible for your coinsurance until you hit your out-of-pocket maximum. Your coinsurance will be billed to you after the time of service.

Example: Ashley’s therapy appointment cost $120. Her copay is $20, and her coinsurance is 10%. She paid her $20 copay at the time of service. However, her yearly deductible is $1,000, and she has not put any bills toward it yet. This means Ashley will have to pay the additional $100 of her therapy bill out-of-pocket until she reaches $1,000 in bills. Once she hits her yearly deductible of $1,000, she will pay $10 out-of-pocket per therapy session using her coinsurance.

Why does it matter?

Overall, your copay and coinsurance are likely very different. The best course of action when choosing a new insurance plan is to educate yourself on the differences and make an informed decision, so you're aware of what you'll owe when you seek out health care. 

Additional ways to pay for mental health care

Browse these articles to learn more about insurance benefits and other ways to pay for mental health care.

• What You Should Know About Your Insurance’s Mental Health Benefits
• Employee Assistance Program (EAP): What It Is and Why You Should Care
• How Much Will That Therapy Appointment Cost?
• Health Care Insurance Acronyms: HMO, PPO, EPO, POS 
• SonderMind’s Health Care Insurance Dictionary 

‍If you or a loved one are experiencing a mental health emergency, do not use this site. Instead, call 911 or use one of these emergency resources.