Question

What is the main difference between coinsurance and copayments?

A With coinsurance, the insurer pays all of the cost.
B Coinsurance is a set dollar amount.
C Copayment is a set dollar amount.
D With copayments, the insured pays all of the cost.

Answer 1

Coinsurance requires the policyholder to pay a percentage of the costs, while copayments require a fixed amount to be paid for each service or prescription.

Step-by-step explanation:

The main difference between coinsurance and copayments is how the costs are shared between the insured party and the insurance company. With coinsurance, the policyholder is responsible for paying a certain percentage of the costs, while the insurance company pays the remaining percentage.

For example, if the coinsurance rate is 20%, the policyholder pays 20% of the costs and the insurer pays 80%. On the other hand, copayments require the insured party to pay a fixed dollar amount for each service or prescription, while the insurance company covers the remaining costs. For instance, a doctor visit copayment might be $20, and the insurance company would pay the rest of the bill.