Understand How Coinsurance Affects You
Have you ever received a medical bill or benefit statement and been confused by the terminology? Most of us have, and it can be frustrating to not understand what you owe and why.
For instance, if you’re unsure what coinsurance is, here’s what you should know.
What is coinsurance?
Coinsurance is a percentage of a covered service amount after you’ve met your deductible. This percentage varies by insurance plan. Here’s an example of how coinsurance might apply to a medical bill you receive:
- Cost: $10,000
- Deductible: $2,000
- Coinsurance: 30%
If you’ve met your deductible this year, you’d owe $3,000 and your insurance would pay $7,000.
If you’ve only paid $1,000 toward your deductible, you’d first owe the remaining $1,000 deductible. After subtracting that payment from your $10,000 bill, you would also owe 30% coinsurance on the $9,000 balance, or $2,700. Your out-of-pocket cost would be $3,700.
Most insurance plans also have a maximum amount they can require you to pay out of pocket for the year. If your maximum out-of-pocket limit for the year is $5,000, once you’ve paid that amount toward your deductible and coinsurance, your insurance company would pay 100% of your remaining covered services for the year. Coinsurance would no longer apply.
Is a copay different from coinsurance?
A copay is an out-of-pocket expense you might pay as a flat fee for medical services like prescriptions, provider visits and emergency care. Copays apply whether you’ve met your deductible or not and are due immediately. Not all insurance plans charge copays, but many do.
What are your health care coinsurance costs?
If your deductibles and coinsurance percentages aren’t printed on your insurance identification card, you can find them by reviewing your policy documents, calling your insurance carrier or logging in to your insurer’s website.