What is the Meaning of Coinsurance and Copay?

When investing in a health insurance policy, there are many commonly used terms that may be confusing for many individuals. Two such terms are coinsurance and copay. In health insurance, these are the types of cost- sharing methods.

If you’ve ever wondered what the meaning of coinsurance and copay in health insurance is, keep reading this article to understand better.

What is coinsurance in health insurance?

Coinsurance is the percentage of the medical bill that the health insurance policyholder has to pay after he/she met the deductibles. Let’s understand it with the help of an example:

Suppose Ram’s health insurance policy has 20% coinsurance, the insurance company pays 80% of the approved bill, and Ram will pay the remaining 20%. So, in situations where the hospital bill is Rs. 1,00,000, the policyholder, i.e., Ram, will pay Rs. 20,000, and the company will pay for the remaining Rs. 80,000.

Coinsurance is applied in services, such as:

• Hospitalisation expenses


• Major surgeries


• Long‑term treatments

Can I Minimise the Cost of my Coinsurance?

Fortunately, yes, you can do so by:

• Select hospitals and doctors from your insurance provider's network.


• Go for low preventive care.


• Review Your Plan Annually

What is a copayment in health insurance?

Copayment refers to the fixed amount that you have to pay for the medical services you need. However, the remaining cost will be covered by the insurer.

Let’s understand with the help of an example:

Suppose, Priya has a health insurance policy that offers a copay of Rs. 3000 and the cost of her medical treatment is Rs.11000. Here, Priya has to pay Rs. 3000 from her own, while the health insurance company will pay the remaining amount of Rs. 8000.

Copays are applied to services such as:

• Doctor consultations


• Specialist visits


• Diagnostic tests


• Prescription medicines

Coinsurance Vs copay: What's the difference?