Know the Difference: Copayment vs. Coinsurance

When you get Medicare or purchase a Medicare Supplement Insurance Plan, you need to familiarize yourself with some key terms. After all, you want to know exactly what your coverage includes and which costs you have to pay out-of-pocket. Specifically, you need to understand the difference between co-payments and co-insurance for Medicare and Medigap policies

What Are Co-payments?

In the healthcare world, co-payments are set fees you have to pay for some services or medical supplies. The co-payment tends to be low, such as $10 or $20, and it only applies to specific things such as a doctor’s office visit

Does Medicare Part A Cover Co-payments?

Medicare Part A, which includes hospital stays, skilled nursing home stays, and hospice care, covers nearly all applicable co-payments. That means you’ll rarely have to contribute a co-pay when you go to the hospital, stay in a nursing home, or receive hospice care.

​When you’re in hospice, you might be responsible for a $5 co-pay for any prescription drugs you receive to manage pain and other symptoms. You might also have to cover a minor co-payment for respite care or short-term inpatient care related to a hospice stay.

Which Medigap Plans Cover Co-payments?

There are 11 standardized Medicare Supplement Insurance policies, and many cover all or part of Medicare-related co-payments. These costs are included in the following Medigap plans:

  • Part A hospice care co-payment and Part B co-payment: Plan A, Plan B, Plan C, Plan D, Plan F, Plan G, Plan M, and Plan N
  • 50 percent of Part A hospice care co-payment and 50 percent of Part B co-payment: Plan K
  • 75 percent of Part A hospice care co-payment and 75 percent of Part B co-payment: Plan L

What Is Medicare Co-insurance?

Medicare covers most of your medical costs, but it doesn’t include everything. Co-insurance is the share you have to pay after reaching your deductible. Unlike a co-payment, co-insurance is usually a percentage of the total cost

Does Medicare Part A Cover Co-insurance?

According to Medicare.gov, Medicare Part A covers some co-insurance for hospital, mental health, and skilled nursing facility stays. For hospital and mental health inpatient stays, you pay no co-insurance for the first 60 days, $329 co-insurance per day for Days 61 through 90, and $658 co-insurance per day for Days 91 and beyond. For skilled nursing facility stays, you pay no co-insurance for the first 20 days and $164.50 co-insurance per day for Days 21 through 100. Keep in mind that these co-insurance costs apply to services received in 2017, and Medicare costs are adjusted each year.

Does Medicare Part B Cover Co-insurance?

Medicare Part B co-insurance is more straightforward because the same amount typically applies to all services. After you meet your deductible, which is $183 per year in 2017, you’ll pay 20 percent co-insurance for most doctor visits, outpatient services, and durable medical equipment. Part B co-insurance doesn’t apply to some preventive services, so be sure to ask your doctor for confirmation.

Which Medigap Plans Cover Co-insurance?

Several Medicare Supplement Insurance policies alleviate your out-of-pocket costs by covering co-insurance. The following plans include co-insurance costs:

  • Part A co-insurance and hospital costs up to 365 days after you’ve used up your Medicare benefits, Part A hospice care co-insurance, and Part B co-insurance: Plan A and Plan B
  • Part A co-insurance and hospital costs up to 365 days after you’ve used up your Medicare benefits, Part A hospice care co-insurance, Part B co-insurance, and skilled nursing facility care co-insurance: Plan C, Plan D, Plan F, Plan G, Plan M, Plan N
  • Part A co-insurance and hospital costs up to 365 days after you’ve used up your Medicare benefits, 50 percent of Part A hospice care co-insurance, 50 percent of Part B co-insurance, and skilled nursing facility care co-insurance: Plan K
  • Part A co-insurance and hospital costs up to 365 days after you’ve used up your Medicare benefits, 75 percent of Part A hospice care co-insurance, 75 percent of Part B co-insurance, and skilled nursing facility care co-insurance: Plan L

Compare Medigap Insurance Plans side by side

Now that you know the difference between co-payments and co-insurance, you can make an informed decision about the right Medigap policy for your health care needs. If this article helped clear up the mystery of Medicare, share it with family and friends to help them make smart health care decisions, too.

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