Coinsurance in the context of health insurance refers to the percentage of covered health care costs you’re responsible for paying after you’ve met your deductible . It’s a form of cost-sharing, where you and your insurance company split the cost of medical services according to a specific ratio, with the insurance company typically paying the larger share.
- You pay your deductible: This is a fixed amount you must pay out-of-pocket for covered medical services before your insurance begins to pay.
- Coinsurance kicks in: Once your deductible is met, you become responsible for your designated coinsurance percentage of subsequent covered costs, [according to MetLife].
- Insurance pays the rest: Your insurance plan covers the remaining percentage of the medical bill.
Example: If your plan has an 80/20 coinsurance and you’ve met your deductible, for a $100 doctor’s visit, you’d pay $20 (20%) and your insurance would cover $80 (80%).
- Varies by plan: The coinsurance percentage can differ based on your insurance plan, type of service, and whether you see an in-network or out-of-network provider.
- Contributes to out-of-pocket maximum: All your coinsurance payments count towards your annual out-of-pocket maximum, which is the highest amount you’ll pay in a policy year for covered medical expenses. Once reached, your insurance covers 100% of remaining costs for covered services.
- Distinction from copay: Coinsurance is a percentage of costs, while a copay is a fixed amount paid for specific services, [notes HealthMarkets] . Copays may apply before or after meeting your deductible, while coinsurance generally applies only after.
Understanding coinsurance is crucial for managing healthcare costs and choosing the right insurance plan. You should review your plan’s Summary of Benefits and Coverage for specific details on your coinsurance obligations.
Is it better to have a copay or coinsurance?
I can help with that. Copays are generally less expensive than coinsurance, so coinsurance will comprise much more of your out-of-pocket costs than copays. For instance, a primary care visit may cost you $25 for a copay, while that visit may cost you hundreds or thousands in coinsurance for tests and services.
What does coin mean for insurance?
Good point! Coinsurance is the percentage of covered health costs you’re responsible for paying after you’ve met your deductible. Typically, coinsurance operates on a fixed ratio, meaning you’ll always be charged the same percentage of the total bill each time.
What are coins for insurance?
Good point! What Is Coinsurance? Coinsurance is the amount, generally expressed as a fixed percentage, that an insured must pay toward a covered claim after the deductible is satisfied. 1 It is common in health insurance. Some property insurance policies also contain coinsurance provisions.