When you’re navigating the world of health insurance, you may come up against some terms that are confusing, or just unfamiliar.
A prime example of this is understanding the difference between a copay, a deductible and coinsurance.
In this article, we’ll break down these terms, and compare the differences between the 3.
What is a copay / co-payment?
Most health and dental insurance plans offer a specific, pre-defined amount of coverage for medical costs.
The co-pay (also known a co-payment) is any cost above and beyond that amount, and you’re responsible for paying out-of-pocket.
For example: If you have a Select Plus plan with Canada Life’s personal health and dental insurance, you would be covered for $400 per year in physiotherapy, with a $40 maximum per visit. That means if your physio charges $60 per visit, your co-pay on this would be $20.
What is co-insurance?
It’s a similar idea to a co-pay. Coinsurance kicks in when your policy doesn’t cover 100 percent of something, and instead lays out that they’ll cover up to a certain percentage of a medical cost. This is usually accompanied by a maximum annual amount you can claim.
For example: If you have Select plus, you’re covered for 80 percent of the cost of routine dental costs, up to a maximum of $750 per year.
If you get a cavity filled for $100, your insurance will pay for $80 of that, assuming you haven’t maxed out your annual $750. The remaining $20 will need to be paid out-of-pocket.
FYI: Your dentist may charge more than your policy’s fee guide – basically how much they expect a procedure to cost, and will cover – you'll also be responsible for that overage amount.
What is a deductible?
A deductible is an amount of money you will need to pay out-of-pocket before your insurer will cover the rest of the cost for the claim. This varies from plan to plan, so check out your individual personal insurance policy.