What are the Differences Between a Coinsurance Fee and a Co-payment?

From time to time, the terms coinsurance and co-payment are used interchangeably. But don’t get them confused: it’s fairly important to define the two terms separately, despite the fact that in practice they function in relatively similar ways.

Co-payments: If your health plan does require co-payments, it means that you’ll have to pay a fixed dollar amount (e.g., $5.00, $10.00 or $20.00) whenever you visit your doctor, clinic or hospital. Co-payment provisions are normally a part of healthcare plans offered by HMOs (Health Maintenance Organizations), where a co-payment is required for office visits, prescription, etc.

Coinsurance: Coinsurance on the other hand, properly refers to the practice of requiring that you pay a fixed percentage (usually around 10 to 20%) of your medical bills out of pocket.