| First, what is the official definition of | | | | of the 1000 (or $300) since your deductible |
| co-insurance? | | | | was already met. When do you stop paying the |
| | | | 30%?? |
| Coinsurance | | | | |
| | | | Stage 3 - The Max Out of Pocket THE CARRIER |
| Once you have met your deductible, you pay | | | | PAYS 100% |
| coinsurance for additional medical care. It | | | | |
| is a percentage of the billed charge. For | | | | Once you have met your Max out of Pocket |
| example, your insurance company might pay | | | | (sometimes called the Copay Maximum), the |
| 80%, and then you would pay 20%. It is | | | | carrier will then pay 100% of covered |
| similar to a co-pay, but is a percentage | | | | benefits, in-network. For our plan example, |
| instead of a dollar amount. | | | | let's say we have a $500 deductible, 70/30 |
| | | | co-insurance, and $5000 max out of pocket. If |
| Now, let's dig a little deeper. With | | | | we get a $50,000 bill in a calendar year, you |
| California health insurance, it is common to | | | | pay the first $500, then 30% until you |
| speak of their plan as an 80/20 plan or a 70 | | | | reached another $5000 out of pocket. For that |
| 30 plan. They are essentially referring to | | | | $50K, you would pay $5500 and the carrier |
| the co-insurance part of it. With the 80/20 | | | | would pay $45,500. Co-insurance is nice but |
| example, the health carrier is picking up 80% | | | | the real reason to have health insurance is |
| of the charges and you are picking up the | | | | the max out of pocket. |
| remaining 20%. If there is any kind of | | | | |
| deductible, you must pay that first at 100% | | | | Co-insurance usually applies to services |
| until met. | | | | outside of the office visit and |
| | | | prescriptions. You will typically see the |
| Let's take an example and see how California | | | | same co-insurance percentage for hospital, |
| health insurance plans essentially break down | | | | lab, surgery, emergency (sometimes has |
| into three main stages. | | | | separate additional copay) and physician |
| | | | services. |
| Stage 1 - The deductible YOU PAY 100% | | | | |
| | | | It's important to stay in network for PPO |
| Let's say you have a $500 deductible. Except | | | | plans. Let's say you have 70/30 plan and you |
| for services that are separate from the | | | | see a doctor out of the PPO network on a |
| deductible (usually office visits and | | | | non-emergency basis for $1000 of services and |
| prescriptions...see COPAYS), you will pay the | | | | your deductible is already met (you're in |
| discounted charges at 100% until you meet | | | | Stage 2). Two things will probably happen. |
| your deductible. You can find more | | | | The health insurance plan will probably have |
| information on deductibles. | | | | a separate percentage for out of |
| | | | network...let's say 50/50 instead of 70/30. |
| Stage 2 - The co-insurance YOU SHARE A | | | | Also, the carrier will apply this lesser |
| PERCENTAGE | | | | percentage to what they would pay an |
| | | | in-network provider. For example with the |
| Once the deductible is met, you then start | | | | $1000 charge, perhaps the contracted PPO rate |
| sharing the cost with the carrier. Let's say | | | | is $600 (discount is usually 30-60%). The |
| our plan is 70/30 and the charge is $1000. | | | | carrier would then pay 50% of the $600 or |
| You pay the first $500 (deductible) and then | | | | $300 of the total $1000. You pay $700. |
| you pay 30% of the remaining $500...or $150. | | | | Compare this with the 30% of 600 you would |
| Of the first $1000 charge, you would pay $650 | | | | pay for an in-network provider. $700 versus |
| out of it. If you have another $1000 charge | | | | $180 out of your pocket. Use in-network |
| in that same calendar year, you would pay 30% | | | | providers! |