Understanding How Coinsurance Works
Many of us have no idea how much a doctor’s visit, medical procedure or prescription will cost until we get the bill. And it’s not our fault: Medical billing is notoriously confusing.
But things can become a little more clear when you understand how your health insurance policy works. One term you should be familiar with is coinsurance.
Here's what you need to know about it.
What is coinsurance?
Coinsurance describes how you share medical expenses with your insurer after you meet your deductible. Your deductible is the amount you pay out of pocket each year before your insurance starts paying for a portion of your bills.
If your health plan has 80/20 coinsurance, your policy will pay 80% of your bills after you meet your deductible, and you'll pay 20%. Some plans have 90/10, 70/30 or 60/40 coinsurance instead.
How is coinsurance different from a copay?
It's easy to mix up these two terms. A copay, or copayment, is a flat fee you pay when you receive a medical service or pick up a prescription. For example, you might have a $15 copay on generic drugs.
When do you pay coinsurance?
You usually pay coinsurance after your insurance company processes your provider's medical bill. Coinsurance is typically less expensive when you see an in-network provider.
Under Affordable Care Act rules, you don't have to pay coinsurance or meet your deductible at all for certain services, including vaccines and screening tests. They're 100% covered.
Do you understand your health insurance coverage? If you have questions about your policy or any unfamiliar terms, get in touch.