What is the key difference between coinsurance and co-payment?

• A. Coinsurance is a fixed amount, while co-payment is a percentage of costs
• B. Coinsurance is a percentage of costs shared after the deductible, while co-payment is a fixed amount
• C. Both coinsurance and co-payment require upfront payment only
• D. Co-payment applies only to medication, while coinsurance applies to all services

Answer: (B)

The key difference lies in how each payment structure functions within a health insurance plan. Coinsurance is defined as a percentage of the costs that a patient shares with their insurance provider after the deductible has been met. This means that if a service costs $100 and the coinsurance rate is 20%, the patient would pay $20 while the insurance covers the remaining $80.

On the other hand, a co-payment is a predetermined fixed amount that a patient pays for a specific service at the time of receiving care. This means when visiting a doctor or filling a prescription, the patient pays a set fee regardless of the total cost of the service.

Given these definitions, the correct answer highlights the essential distinction: coinsurance involves a percentage of the costs incurred after the deductible, whereas a co-payment is a specific amount paid for services.