What is coinsurance?
The coinsurance is a part of the medical expenses you pay after reaching your deductible. Coinsurance is a way of saying that you and your insurance company pay a portion of eligible costs that add up to 100%.
For example, if your coinsurance is 20%, you pay 20% of the cost of your covered medical bills. Your health insurance plan will pay the other 80%. If you meet your annual deductible in June and need an MRI in July, it is covered by coinsurance. If the covered expenses for an MRI are $ 2,000, and your coinsurance is 20%, you must pay $ 400 ($ 2,000 x 20%). Your insurance company or health plan pays the other $ 1,600. The higher your coinsurance percentage, the higher your share of the cost. You are also responsible for paying any expenses that your health plan does not cover, such as expenses that exceed the plan’s maximum reimbursable charge.
What is the out-of-pocket maximum?
The out-of-pocket maximum is the most you can pay for covered medical expenses in a year. This amount includes the money you spend on deductibles, copays, and coinsurance. When you reach your yearly out-of-pocket maximum, your health plan will pay your covered medical and prescription drug costs for the rest of the year.
Here’s an example
You have a plan with a $ 3,000 annual deductible and 20% coinsurance with an out-of-pocket maximum of $ 6,350. You had no medical expenses all year, but then you need surgery and a few days in the hospital. The total hospital bill can be $ 150,000.
You will pay the first $ 3,000 of your hospital bill as your deductible. Then your coinsurance begins. The health plan pays 80% of your covered medical expenses. You are responsible for paying 20% of those expenses until you reach the remaining $ 3,350 of your maximum annual out-of-pocket of $ 6,350. The plan then covers 100% of your remaining eligible medical expenses for that calendar year.
Depending on your plan, the numbers may vary, but the important thing is that you understand how it works. In this example, your out-of-pocket maximum of $ 6,350 is much less than a hospital bill of $ 150,000.
What is the difference between copays and coinsurance?
With this table, you can compare and understand the differences between copays and coinsurance.
Copayments
- It is paid every time you visit the doctor or fill a prescription
- Fixed amount in dollars
- Count toward deductible (in some cases)
- They are paid at the time of receiving the service
Coinsurance
- You pay for services and drugs if you have already met the deductible
- The actual dollar amount varies; you pay a percentage of the total cost of covered services
- Paid after meeting the deductible
- It is invoiced by the provider to whom you will pay directly. Your health plan will also send you an Explanation of Benefits (EOB) detailing the expenses you have to pay.
0