{"id":1691,"date":"2016-06-07T16:08:11","date_gmt":"2016-06-07T20:08:11","guid":{"rendered":"https:\/\/singlecare.com\/blog\/?p=1691"},"modified":"2020-11-24T14:45:04","modified_gmt":"2020-11-24T19:45:04","slug":"healthcare-defined-coinsurance","status":"publish","type":"post","link":"https:\/\/www.singlecare.com\/blog\/healthcare-defined-coinsurance\/","title":{"rendered":"What is coinsurance?"},"content":{"rendered":"<p><i><span style=\"font-weight: 400;\">Sometimes healthcare terms can seem like a whole different language. With words like <\/span><\/i><span style=\"font-weight: 400;\">copay<\/span><i><span style=\"font-weight: 400;\">, <\/span><\/i><span style=\"font-weight: 400;\">deductible<\/span><i><span style=\"font-weight: 400;\">, and <\/span><\/i><span style=\"font-weight: 400;\">out-of-pocket maximum<\/span><i><span style=\"font-weight: 400;\"> being thrown around, how are you supposed to know what\u2019s what? That\u2019s where our Healthcare Defined series comes in. We break down terms so you can understand\u2014and with understanding comes better savings.<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">Here, we\u2019re going to tackle coinsurance. Coinsurance is the percentage of costs of covered healthcare services you have to pay out of pocket after you have reached your annual deductible. This figure is determined by a percentage applied to the total cost of each medical service. Your insurance company pays the higher percentage, and you are expected to cover the smaller one. For example, your insurer pays 80% and you would pay 20%. This concept, often referred to as \u201cpercentage participation\u201d mitigates the risk for the insurance company by requiring the individual to share a portion of the post-deductible costs.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Coinsurance vs. copay<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Understanding coinsurance requires understanding its role within the overall cost-sharing system. Other methods of cost-sharing include <\/span><a href=\"https:\/\/www.singlecare.com\/blog\/difference-between-copay-and-deductible\/\"><span style=\"font-weight: 400;\">deductibles and copays<\/span><\/a><span style=\"font-weight: 400;\">, and all three terms are often\u2014and incorrectly\u2014used interchangeably. <\/span><a href=\"https:\/\/www.singlecare.com\/blog\/healthcare-defined-copay\/\"><span style=\"font-weight: 400;\">Copays<\/span><\/a><span style=\"font-weight: 400;\"> are a flat fee that an individual is required to pay at the time of a doctor\u2019s office visit or for a prescription. A coinsurance payment, by contrast, is a percentage of a doctor or pharmacy\u2019s overall fees, meaning that the out-of-pocket expense can vary.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some consumers operate under the assumption that once they fulfill their annual <\/span><a href=\"https:\/\/www.singlecare.com\/blog\/deductible-vs-out-of-pocket-maximum\/\"><span style=\"font-weight: 400;\">out-of-pocket<\/span><\/a><span style=\"font-weight: 400;\"> deductible, their health insurance company will step in and cover any additional costs for the rest of the year. Unfortunately, the system isn\u2019t always so simple.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A deductible is a fixed amount that an individual must pay out-of-pocket before the insurance company will step in to cover most healthcare costs. Coinsurance goes into effect after the deductible has been met.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The broad concept of coinsurance is fairly simple. After your deductible has been met, your insurance company will cover a certain percentage of the overall cost of each visit, leaving you responsible for the remainder. For example, let\u2019s say you have a $1,000 procedure and your insurance covers 90% of the overall cost. Your coinsurance is 10%, which in this case would be $100.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Is coinsurance good or bad?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Coinsurance isn\u2019t necessarily good or bad, but a reality of many insurance plans. The good news is there\u2019s frequently a limit to your total potential out-of-pocket expenses. Your insurance company will finally foot the entire bill for a covered service once you\u2019ve reached the out-of-pocket maximum, which includes your annual deductible and coinsurance fees. The bad news is that most people never meet their maximum out-of-pocket costs year to year.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is an out-of-pocket maximum?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">An out-of-pocket maximum is the most money a person will pay for medical services covered by insurance in a year. After meeting a deductible, you still have to pay a percentage through coinsurance. However, once the out-of-pocket maximum is met when paying a certain amount for deductibles, copayments, and coinsurance, the insurance company will pay 100% of services covered by your health insurance plan.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So in the same example from above, let\u2019s say your plan has a $5,000 out-of-pocket maximum. Once you have spent that amount in deductibles, copays, and coinsurance, the insurance will pay at 100% until your plan resets (typically at the end of the calendar year).<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What does coinsurance mean for you?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Your coinsurance percentage will vary depending on the health insurance policy or <\/span><a href=\"https:\/\/www.medicare.gov\/your-medicare-costs\/medicare-costs-at-a-glance\"><span style=\"font-weight: 400;\">Medicare plan<\/span><\/a><span style=\"font-weight: 400;\"> you choose. After hitting your deductible, the most common percentages of your insurance versus what you cover are usually 80\/20, 90\/10, or 70\/30.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So you just hit your deductible\u2014let\u2019s call it $2,000\u2014which means you\u2019ve spent that much on various covered medical expenses in a year. Now, your coinsurance kicks in. If your coinsurance is 20%, you pay 20% of each medical bill total, and your insurance covers the remaining 80%.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, you visit the doctor for a sore throat, and the bill totals $100. If your coinsurance is 20%, you will be charged $20 for that visit and your insurance will pay $80.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But things can get more complicated from there. Insurance companies will often set up higher coinsurance rates for services that fall outside of their network\u2014that is, services that are performed by medical professionals who don\u2019t have a contract with your insurance company.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">An in-network coinsurance rate of 10% often jumps to 30% or 40% for an out-of-network doctor or prescription. Some plans may not even offer any out-of-network coverage.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">What\u2019s more, if the fee for the service provided was higher than what an in-network provider would charge, the individual will often have to make up the difference in cost.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">How to choose the right plan<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you find that you have higher medical costs each year, you may want to consider a plan with a higher <\/span><a href=\"https:\/\/www.singlecare.com\/blog\/healthcare-premium-defined\/\"><span style=\"font-weight: 400;\">monthly premium<\/span><\/a><span style=\"font-weight: 400;\">, as that will likely have a lower deductible and coinsurance, and your insurance will cover more of your medical expenses sooner.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you rarely visit the doctor, you may want to consider a plan with a low monthly premium even though it may have a high deductible and coinsurance. And remember, deductibles reset when your plan year ends.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Consideration of coinsurance and deductible amounts are among the many factors you should think about when choosing a plan. You should also consider whether your doctors participate in a plan\u2019s network and whether the specific medical services you require are covered.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">No matter your insurance plan, <\/span><a href=\"https:\/\/www.singlecare.com\/\"><span style=\"font-weight: 400;\">SingleCare<\/span><\/a><span style=\"font-weight: 400;\"> can help with prescription drugs that may be unaffordable even with insurance. Just search for your drug and find the best price\u2014there are no hidden fees to join or use.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sometimes healthcare terms can seem like a whole different language. With words like copay, deductible, and out-of-pocket maximum being thrown around, how are you supposed to know what\u2019s what? That\u2019s where our Healthcare Defined series comes in. We break down terms so you can understand\u2014and with understanding comes better savings. Here, we\u2019re going to tackle [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":9540,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[691],"coauthors":[8861],"class_list":["post-1691","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company","tag-healthcare-costs","franchise-healthcare-defined","wpautop"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Healthcare Defined: What is coinsurance? - The Checkup<\/title>\n<meta name=\"description\" content=\"Coinsurance is the percentage of healthcare costs insurance will cover versus your out-of-pocket costs. 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