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