A copay, coinsurance, and deductible are three separate costs you pay out of pocket for medical care, and they work in sequence throughout the year. A deductible is the amount you must pay for covered health care services before your insurance plan starts to pay, a copay is a fixed dollar amount—such as $20 for a doctor visit—that you pay at the time you receive care, and coinsurance is the percentage of costs you pay after you've met your deductible. Understanding how these three pieces fit together lets you predict your medical bills and identify when your insurance company should start paying. Each term describes a different stage of cost-sharing, and each applies at a different point in your coverage year.
Table of Contents
- How These Three Costs Stack Up in Order
- A Concrete Example of How Costs Add Up
- Preventive Care Has Different Rules
- Your Out-of-Pocket Maximum Stops the Costs
- Cost-Sharing Reductions for Lower-Income Families
- Medicare Part B Has Its Own Cost Structure
- Frequently Asked Questions
How These Three Costs Stack Up in Order
Your medical bills follow a predictable sequence. First, you pay 100% of the cost of any covered service until you reach your deductible amount for the year. Once you've paid your deductible, your insurance plan begins to share costs with you. At that point, you'll start paying either copays or coinsurance (or sometimes a combination of both, depending on your plan) for each service.
This continues throughout the year until your total out-of-pocket spending reaches your annual maximum. The order matters because nothing happens in reverse. If you've paid $2,000 of a $3,000 deductible and you have an emergency room visit with a $100 copay, that $100 copay doesn't count toward your deductible—you still owe the remaining $1,000 on the deductible first.
A Concrete Example of How Costs Add Up
Let's say you have a plan with a $3,000 deductible, 20% coinsurance, and a $10,600 out-of-pocket maximum. You receive a medical service with an allowed amount of $12,000 (the price your insurance company has negotiated with the provider). Here's what you pay: First, you pay the full $3,000 deductible.
Then, after the deductible is met, you pay 20% coinsurance on the remaining $9,000, which equals $1,800. Your total out-of-pocket cost for that service is $4,800. This amount counts toward your annual out-of-pocket maximum. Importantly, the coinsurance is calculated on the plan's allowed amount, not the provider's inflated billed charges, which protects you from unlimited liability. Even if the provider's bill was $15,000, your coinsurance is only 20% of the $12,000 allowed amount—not the higher figure.
Preventive Care Has Different Rules
One major exception cuts through all three cost categories: preventive health services including screenings, immunizations, and preventive visits are covered at no cost with no copayment, coinsurance, or deductible when using in-network providers. This applies even if you haven't yet met your deductible for the year.
This means an annual physical exam, mammogram, colonoscopy, blood pressure check, or flu shot—if ordered as a preventive service—costs you nothing. However, if that visit or test becomes diagnostic (for example, your doctor diagnoses high blood pressure and prescribes treatment during a preventive visit), any follow-up care for that condition may be subject to your deductible and coinsurance.
Your Out-of-Pocket Maximum Stops the Costs
Even if you face ongoing medical needs throughout the year, there's a financial ceiling. Once your deductibles, copayments, and coinsurance total your annual out-of-pocket maximum—$10,600 for individuals or $21,200 for families in 2026 Marketplace plans—your insurance pays 100% of covered in-network services for the remainder of the year. This annual maximum protects you from catastrophic expenses.
After you've paid this amount out of pocket, you stop paying copays and coinsurance; your insurance covers the full cost of any remaining covered services through December 31. The out-of-pocket maximum resets each January 1st and includes your deductible, copays, and coinsurance—but not your monthly insurance premiums. If you use multiple providers or face a serious illness with many medical visits, reaching this maximum early in the year means you're fully protected for the rest of it.
Cost-Sharing Reductions for Lower-Income Families
If you enroll in a Marketplace health plan and your income qualifies, you may be eligible for help. Qualifying low-income individuals enrolled in Silver category Marketplace plans can receive cost-sharing reductions that lower their deductibles, copayments, coinsurance, and out-of-pocket maximums. These reductions make your out-of-pocket costs significantly smaller than the standard plan amounts. To apply for cost-sharing reductions, you must be enrolled in a Silver plan through the Health Insurance Marketplace during the open enrollment period or a qualifying life event, and your household income must fall within the eligible range (typically between 100% and 250% of the federal poverty line, depending on your family size).
Medicare Part B Has Its Own Cost Structure
If you're covered by Medicare, the same three terms apply but with specific amounts. Medicare Part B has a $283 annual deductible and 20% coinsurance on allowed amounts after the deductible is met, with an out-of-pocket maximum that protects beneficiaries from unlimited costs. Unlike commercial plans, Medicare typically doesn't use copays (fixed dollar amounts) but relies instead on deductibles and coinsurance percentages.
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Frequently Asked Questions
Does my deductible count toward my out-of-pocket maximum?
Yes. Every dollar you pay toward your deductible, every copay, and every coinsurance payment all count toward your annual out-of-pocket maximum. Once you reach that total, your insurance covers 100% of covered services for the rest of the year.
If I have a $25 copay, do I also pay coinsurance?
Not for that visit. Copays and coinsurance are two different cost-sharing methods—your plan uses one or the other for a given service, not both. A $25 copay means you pay $25 and your insurance covers the rest (after your deductible is met). Coinsurance means you pay a percentage instead of a flat fee.
Do copays count toward my deductible?
No. Your deductible must be paid before copays and coinsurance begin. Copays only start after you've satisfied your deductible.