What You Need to Know About Coinsurance

Why You Might Still Owe Even After Meeting Your Healthcare Deductible

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Coinsurance is the percentage amount a patient is required to pay towards their own health insurance bill when they file a health insurance claim.

What Is Coinsurance?

Some health insurance providers require that a patient pay a percentage of the cost of covered health-related services after the annual deductible has been met. This is coinsurance. Coinsurance often amounts to about 20% to 30% of what the health plan approves. The health plan will then pay the remaining 70% to 80%. The coinsurance percentage is typically applied in addition to the deductible, which needs to be paid prior to the insurance company paying anything out on their end. Only after the deductible is paid in full will you be sharing the cost of your care with your health plan by paying coinsurance.

Here is an example of how coinsurance might work:

Mr. Jones has a family health plan with a $500 annual deductible and 20% coinsurance. In February, his wife and two children got checkups from their family physician. Mr. Jones paid the physician for these services, which cost $510. In March, one of the children got sick and the cost of the office visit was $50. Since the annual deductible was met, the health plan paid the doctor $40 (80%) and Mr. Jones paid the doctor $10 (20%)

Out-of-Pocket Maximum

Coinsurance is applied toward a patient’s annual out-of-pocket maximum. The yearly out-of-pocket maximum is the highest or total overall amount a health insurance company requires a patient to pay themselves towards the total cost of their health care.

Once a patient’s deductibles, copayments, and coinsurance paid for a particular year add up to the out-of-pocket maximum, the patient’s cost-sharing requirements are then finished for that particular year. Following the fulfillment of the out-of-pocket maximum, the health plan then picks up all of the cost of covered in-network care for the remainder of the year.

Calculating Your Health Insurance Coinsurance

Deductibles and copayments are fixed amounts of money. Thus, it is not very difficult to figure out how much is owed. A $50 copayment for a prescription will cost $50 no matter the total. Calculating a health insurance copayment is slightly different, and more difficult, as a coinsurance is a percentage of the total cost of service, rather than a set amount. Thus, coinsurance will be different with each individual service received. If the health care service receive is a relatively cheap service, then the coinsurance will be relatively cheap as well. However, if the health care service received was expensive, the coinsurance will end up being expensive as well.

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