Coinsurance vs Copay vs Deductible: 3 Easy Differences
The three terms confuse clients and staff alike. In short, a deductible is what a client pays before the plan starts paying, a copay is a flat amount per visit, and coinsurance is a share of the allowed amount. This post explains coinsurance vs copay and the deductible, so you can tell a client what they owe. HealthCare.gov defines each term: deductible and coinsurance.
See coinsurance in our glossary for the billing view.
Difference 1: When each one applies
The deductible comes first. The client pays for covered care until the deductible is met. After that, the plan pays its share, and the client pays a copay or coinsurance, depending on the plan. Some plans apply a copay even before the deductible, so check each plan during patient benefit verification. The coinsurance vs copay difference matters most after the deductible is met.
Difference 2: Flat amount vs a share
A copay is a fixed dollar amount for a visit. Coinsurance is a share of the allowed amount, so the dollar amount changes with the code and the plan. Here is a hypothetical example, not a real rate: if the allowed amount is $100 and the coinsurance is a set share of it, the client pays that share of $100. Read allowed amount in therapy billing to see why the allowed amount matters more than your fee.
Difference 3: Where you see each one on the EOB
The explanation of benefits (EOB) and the electronic remittance advice list the amount applied to the deductible, the copay and the coinsurance separately. Post each one correctly so you can bill the client the right amount. See the EOB glossary entry and payment posting. Clients often mix up the coinsurance and the copay on the EOB, so point each one out when you review a statement together, and explain that the amounts apply to the allowed amount, not to your fee.
How to explain coinsurance vs copay to a client
Plain words about coinsurance vs copay prevent most billing questions. Use plain words. Tell the client what they owe for the first visit, what they might owe after the deductible and what changes when the plan year resets. Put it in writing. Our guide to insurance verification for therapists and our verification service help you gather the numbers.
Mistakes to avoid when you explain coinsurance vs copay
Do not guess the client’s share. Do not collect the full fee when the plan will pay part of it. Do not forget that a plan may change at the start of a new year. If a payer pays less than expected, see who follows up on denied claims. A billing service tracks these numbers on every claim: see what it does.
Frequently asked questions
What is the difference between coinsurance and a copay?
A copay is a flat amount for each visit. Coinsurance is a share of the allowed amount that the client pays after the deductible.
Which comes first, the deductible or the copay?
It depends on the plan. Many plans apply the deductible first, and some charge a copay before it. Verify each plan.
Where do I find what the client owes?
Check your benefit verification notes first, then the EOB or remittance advice after the claim is processed.
Can MCM South verify these amounts?
Yes. MCM South checks benefits and records the deductible, copay and coinsurance for each client.
Where MCM South works
MCM South Medical Billing Service, LLC works with psychotherapists and psychiatrists in our ten currently served states: Georgia, Massachusetts, Connecticut, Texas, Florida, New York, Colorado, Tennessee, North Carolina and Illinois. We serve solo and medium-size practices that bill mental and behavioral health. Founder Michael Williams has worked with insurance payers in all 50 states. Browse the state and regional billing guides for rules that vary by state, or see our billing services.
This post is operational guidance for billing, not legal advice. Rules change, so confirm with the payer or your counsel.
