Sitting down to look over Medicare plans, have you found yourself asking, “What’s a copay? What’s co-insurance?” You’re not alone. Insurance and Medicare can often cause confusion. Understanding the different kinds of Medicare plans and what you’ll need to pay can be complicated, especially when terms like copay and co-insurance are thrown around.

What’s important to know is that the two payment types are straightforward and impact what you pay for medical care, services, and prescriptions. 

If you have Medicare, you can be responsible for both a copay and co-insurance when you seek medical care. Knowing if these count toward your deductible and how they can affect your coverage is important when balancing your budget and preparing for any potential bills owed.

Copays in Medicare: What is a copay?

A copay (copayment) is a specific dollar amount you’ll pay every time you fill a prescription or see your medical provider. 

Medicare, including Original Medicare, Medicare Advantage (Medicare Part C), and Medicare Part D, may charge copayment for prescriptions and services such as hospice care or outpatient services, depending on your specific policy. 

How do copays work with deductibles? 

Annual deductibles are a specified amount a beneficiary must pay before Medicare pays the claim, and annual deductibles can vary depending on the type of Medicare plan you have. For example, Medicare Part A has a deductible of $1,676. Part B’s deductible is $257. If you have Medicare Advantage or Part D, you may need to pay copays on top of your annual deductible. 

Medicare Supplement plans may cover some of these costs in certain circumstances.

Do copays go toward deductibles?

If you do have a copay with your Medicare plan, that copay typically won’t count toward your deductible.

What is 20% co-insurance, and how does the 20% co-insurance rule apply?

Co-insurance is a percentage payment that you or Medicare will cover after you reach your deductible. Specifically for Medicare Part B, your co-insurance responsibility will be 20%. That 20% is charged for each Medicare-covered service or item you receive after you reach your annual deductible if your healthcare provider or doctor accepts the Medicare-approved amount for the service as full payment. Medicare will cover the other 80% of the claim.

Continue learning about Medicare with SmartMatch

To recap, you’ll need to pay copays for some services, such as for some medications used in hospice and outpatient services in hospitals. If you have a Medicare Advantage plan or a Medicare Part D plan the copays you pay will vary by the type of plan you choose. Your copays won’t go toward your deductible, and you may be required to pay 20% co-insurance once you’ve met your deductible For more information on Medicare, copays, co-insurance, and finding the right plan, contact SmartMatch and compare plans to find costs and coverage that work for you.

Learn more Medicare terms in our glossary