Unfortunately, they don’t make it easy. For example, they use the terms ‘coinsurance’ and ‘copay’ very often. If you don’t understand the difference, you can find yourself owing alot of money and not knowing why.

The terms are really simple, once you understand them:

Coinsurance: coinsurance is a term used for a percentage amount you are responsible for. For example if your insurance policy is 80/20, where you are responsible for paying 20% of your bill, the 20% is a coinsurance.

Copay: copay is usually a flat fee. For example, every time you go to the doctor you pay a 25.00 copay for the office visit, regardless of the level of service you receive.

Be careful, though. Normally, copays do not apply to deductibles, where coinsurance does. You may find yourself being nickle-and-dimed in copay fees, then stuck with a higher deductible should anything major come up. Check your insurance policy to make sure.

The more you know about the terms in your insurance policy, the more you will understand what rights you have, and which insurance programs are right for you.

Jerry Hanel is partial owner of InsuranceQNA.com.