What is the difference between co-insurance and co-pay?

Co-pay refers to a specific dollar amount that a patient pays when they receive a particular healthcare service, such as visiting a doctor or filling a prescription. This fee is predetermined by the insurance plan and remains the same regardless of the total cost of the service. For example, if a health plan requires a co-pay of $20 for a doctor's visit, the patient pays that amount at the time of the visit, while the insurance company covers the rest of the cost.

In contrast, co-insurance is different in that it involves a percentage of the total cost of a service. After the deductible has been met, patients typically pay a certain percentage of the costs, which varies based on the specific terms of their health insurance plan. For instance, if an insurance plan stipulates a 20% co-insurance for a service costing $100, the patient would pay $20, and the insurance would cover the remaining $80, rather than a fixed dollar amount.

Understanding this distinction is crucial for comprehending how healthcare costs are shared between patients and their insurance plans, affecting out-of-pocket expenditures.