Coinsurance, Co-pay, and Deductibles: Are They the Same?

Health Blog
28 Jul 2025
150 Viewed

Contents

What are Deductibles?
What is Co-pay?
What is Meant by Coinsurance?
Copay vs Deductible in Health Insurance
Outcomes of Copay in Health Insurance
Difference between Coinsurance, Co-pay and Deductibles in Health Insurance
FAQs

Buying health insurance is an essential step towards achieving financial independence. After all, when a medical emergency strikes, you do not want to dip into your savings and retirement funds to support the expenses of the treatment. However, it is equally crucial to ensure that you do not buy it without the right knowledge. Knowing the ins and outs of health insurance can help you choose the right product. Three important terms that you should know in this regard and will likely come across, are deductibles, co-pay, and co-insurance. Essentially, all three of them refer to cost-sharing agreements between the insurance company and the insured or another insurance company. If you are new to health insurance, you might be a bit confused as to the meaning of each of these terms. We are here to help you in that regard. Let’s look at what each of them means before diving into their differences.

What are Deductibles?

It refers to a fixed sum of money that the policyholder must pay towards their medical treatment before the insurer starts contributing towards it. There might be a yearly limit on the amount of deductible the insured has to pay. In some cases, the limit might be based on the treatment. * Thus, let’s assume your health insurance policy has a deductible clause of Rs. 6000. Your medical bill came to Rs. 35,000. Now, you must pay the deductible amount of Rs. 6000 before the insurance company pays the balance Rs. 29,000.

*Claims are subject to terms and conditions set forth under health insurance policy.

What is Co-pay?

It is a clause wherein the insured is expected to pay for a portion of the medical treatment. The rest of the bills would then be taken care of by the insurance company. In some manner, it is quite similar to the deductibles feature. The co-pay amount would be pre-decided either via a percentage or a fixed amount.* So, for instance, you have a co-pay clause of Rs. 5000, and you incur a medical bill of Rs. 25,000. Here, you would have to pay Rs. 5000 for the treatment and the rest of the amount, i.e., Rs 20,000, would be paid by the insurer.

*Claims are subject to terms and conditions set forth under health insurance policy.

What is Meant by Coinsurance?

coinsurance refers to a situation where the risk for the insured party is shared by two or multiple insurance companies. Consequently, the claim amount for an event covered under plans from both insurance companies is shared in a manner specified in the policy documents. Usually, coinsurance as a feature is more common among commercial liability policies, where the risk is high, and so is the claim amount. In a corporate coinsurance agreement, there is a “leader” insurer who receives the higher share of the premium and then shares the premium and the claims with the other co-insurers. In individual policies, the coinsurance clause may be provided in the policy documents, specifying the limit to which the relevant insurance company will pay in case another insurance company is also present in the picture to share the claim amount. In some cases, co-insurance may also refer to a cost-sharing agreement between the insurance company and the insured.

*Claims are subject to terms and conditions set forth under health insurance policy.

Copay vs Deductible in Health Insurance

Understanding the difference between copay and deductible is crucial when choosing a health insurance policy. A copay is a fixed amount you pay out-of-pocket for each medical service, whereas a deductible is the total amount you must pay before your insurer begins to contribute. Both mechanisms are forms of cost-sharing that help reduce premium costs and encourage responsible healthcare utilisation. Plans offered by Bajaj Allianz General Insurance Company may include either or both options, depending on the policy structure.

Outcomes of Copay in Health Insurance

When a policy includes copay, you agree to pay a percentage or flat fee for each medical service, while the insurer covers the rest. This helps reduce the insurer’s risk and typically results in lower premiums for you. However, it also means higher out-of-pocket costs during treatment, especially in frequent or high-cost scenarios like hospitalisation or specialty care.

Difference between Coinsurance, Co-pay and Deductibles in Health Insurance

Even though all three concepts might seem the same, there are a few differences between them, which are explained below.

Deductibles	Co-pay	Coinsurance
It refers to a yearly amount which the insured must pay to receive the health insurance compensation benefits.	The co-pay amount must be paid if the rest of the bills have to be paid by the insurer.	It refers to a cost-sharing agreement between two or more insurers for the claim amount.
Only after the deductibles have been paid does the insurance coverage kick in.	Usually, the co-pay amount is paid before the deductible clause kicks in.	The coinsurance clause in the policy document specifies the limit to which your insurance company will pay if you have opted for another insurance policy that covers the same event.
Deductibles are usually found in most insurance policies and may not be substituted with another cost-sharing feature.	In some cases, the co-pay amount may be considered a part of the deductible amount.	Coinsurance clauses are more commonly found in commercial liability policies.

The presence of deductibles, co-pay, and coinsurance clauses may or may not lower your premium. However, note that not all health insurance policies necessarily have these three clauses. There are health insurance plans that do not have any cost-sharing feature at all. Here, the insured would not have to chip in to pay the medical bills. So, choose wisely as per your medical needs and budget.

Should You Opt for Deductibles, Coinsurance, or Copayment?

Choosing between deductible, coinsurance, and copayment depends on your health needs and financial situation. Deductibles suit those who rarely seek medical care, offering lower premiums. Copayments work well for those who prefer predictable expenses. Coinsurance, where you share a fixed percentage of costs, is common in hospitalisations. Policies by Bajaj Allianz General Insurance Company clearly define each component, allowing you to choose the right balance of cost and coverage.

How to Choose the Right Health Insurance Plan?

To choose the ideal health plan, evaluate your medical history, financial capability, and risk tolerance. Look for policies with clear inclusions, manageable copays or deductibles, and wide hospital networks. A plan like those from Bajaj Allianz General Insurance Company, accepted at over 18,400+ hospitals, offers multiple options to align with your health and financial goals.

FAQs

Is Copay applicable during cashless hospitalisation?

Yes, copay is applicable even in cashless hospitalisation. You pay your share directly to the hospital, and the insurer pays the rest.

What does cost-sharing mean in health insurance?

Cost-sharing refers to the portion of medical costs that you pay, which can include copayments, deductibles, or coinsurance.

Does coinsurance count toward the deductible?

No, coinsurance applies after the deductible is met. It is a separate component of cost-sharing.

What is the difference between copay and coinsurance?

Copay is a fixed fee for each service; coinsurance is a percentage of the total cost you share with your insurer.

*Claims are subject to terms and conditions set forth under health insurance policy.

*Standard T&C apply. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.