How do copays, coinsurance and deductibles work with Medicare plans?

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Learn more about how Medicare works.

If you're shopping for Medicare, this page will help you understand some common terms you might come across while you're researching.

Copays, coinsurance and deductibles are all terms to describe money you pay toward health care services and prescription drugs when you have a health insurance plan.

Copays and coinsurance

A copay is a fixed amount of money you pay for a certain service. Your health insurance plan pays the rest of the cost. Coinsurance refers to percentages.

Our Medicare Advantage plans use copays for most services. You pay 20 percent coinsurance for most services with Original Medicare. 

Here's an example of how copays and coinsurance work with a Medicare Advantage plan.

Miriam has BCN AdvantageSM HMO-POS Prestige. This year, she gets knee replacement surgery.

The total bill for the surgery is $30,000. With her plan, she pays a copay of $115 per day for the first six days in the hospital. She stays in the hospital for three days. So she pays $345. Her plan pays for the rest of her hospital costs.

Miriam will also need crutches to get around while her knee heals. Crutches are considered durable medical equipment. With her plan, Miriam pays 20 percent coinsurance for durable medical equipment. That means she pays 20 percent of the cost. The crutches cost $40, so she pays $8. Her plan pays the rest.

There are probably other costs associated with a knee replacement surgery that we won't go over in this example. But this should give you a good idea of how copays and coinsurance work. 


A deductible is the amount of money you pay for health care services before your plan kicks in and starts paying. For most services, you'll pay full cost until you reach the deductible. After you reach your deductible, you’ll still have to pay any copays or coinsurance. Some services will be covered by your plan before you reach the deductible.

Here's an example of how a deductible works.

Grace has Medicare Plus BlueSM PPO Essential. This plan has a $160 deductible. Her plan year starts in January with the deductible intact. That month, she sees her primary care physician for a wellness exam. It's her annual preventive physical.

Preventive care is covered by her plan with no copay or deductible, so she pays nothing for the visit. That means her $160 deductible is still intact.

In May, she's out hiking when she falls and twists her ankle. So she goes to her primary care physician to get it checked out. The visit costs $160. Because she hasn't reached her deductible yet, she pays the full amount for the visit.

Her doctor says she needs to use crutches until her ankle heals. Because she's now met her deductible, she pays 20 percent coinsurance for the crutches. 

Most Medicare Advantage plans have separate medical and pharmacy deductibles. That means that in addition to the $160 medical deductible we used as an example above, you might also have a Part D prescription drug deductible that you’ll need to meet before your plan starts covering your medications.

Original Medicare has its own deductibles. In 2018, Medicare Part B has a $183 deductible each year. Medicare Part A has a $1,340 deductible each benefit period.

Tip: A Medicare Part A benefit period starts when you first go into the hospital or other inpatient facility. It ends when you've been out of the hospital or facility for 60 days in a row.

If you have a Medicare Advantage plan, you don’t have to pay Original Medicare deductibles. But your plan might have its own deductible.

How copays, coinsurance and deductible work together

With a Medicare Advantage plan, we’ll track all the costs you pay – deductible, copays and coinsurance. When you reach a certain amount, we pay for most covered services. This is called the out-of-pocket maximum.

Original Medicare doesn’t have an out-of-pocket maximum. There's no cap on what you pay out of pocket. And if you're in the hospital or a skilled nursing facility, Original Medicare only pays for a certain number of days. After that point, you pay the full amount each day.