What is Coinsurance?

Health insurance plans all come with certain out of pocket expenses such as deductibles, copays, and coinsurance. Copays and coinsurance are often confused, but they are two quite different parts of a health insurance policy. The copay is a specific amount you are required to pay for a specific service, such as a doctor's appointment, while coinsurance is the percentage of the cost of your health care that you and your health insurer agree to share.

Your coinsurance amount applies after your deductible has been met. For example, if your health insurance policy has a $1,000 deductible, you will need to meet that before you are responsible for paying your coinsurance. Your coinsurance may be a set percentage for all services, or it may be a different percentage for each different service. Some plans may also have different levels of coinsurance for in-network or out-of-network care. Most coinsurance percentages range from 10 to 50 percent

Affordable health insurance plans can be made even more affordable through the use of coinsurance since they often reduce monthly premiums. Additionally, coinsurance counts towards any out-of-pocket cap. This means that if you have any serious or chronic health conditions or expensive prescriptions, once you’ve met your out-of-pocket cap through your coinsurance and deductible, your insurance will cover all reasonable and customary expenses.

For example, if you are facing a $50,000 medical emergency or serious illness, a health insurance policy with a $2,000 deductible, an out-of-pocket maximum of $10,000, and a coinsurance percentage of 20 percent would be broken down in the following manner:

• You would first be responsible for your $2,000 deductible. This reduces your overall bill to $48,000.
• Your coinsurance then comes into play. The coinsurance amount would be 20 percent of $48,000, which is $9,600.
• However, since your out-of-pocket maximum is $10,000, you would only be responsible for $10,000. Your insurance would cover the remaining amount.

Self-employed health insurance plans, family health insurance plans, and individual health insurance plans may all offer various levels of coinsurance. Learning more about your options in coinsurance is a valuable way to control your health care costs and improve your level of care.

 

Source: Los Angeles Health Insurance

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