Q: What Does Coinsurance Mean?
Asked by Anonymous on October 12, 2017
What does coinsurance mean, and how is coinsurance different from copay?
A coinsurance amount is usually defined as a percentage of the cost of medical care that you would pay, with the remainder being paid by your insurance company.
For example, assume your coinsurance amount is 20 percent. If the cost of a procedure is $1,000, – assuming your deductible has already been met – this means the insurance company would pay $800, while you would be responsible for the remaining $200. In this example, your coinsurance may read as “80/20” (80 percent paid for by your insurer, 20 percent paid by you). This isn’t standard, though; usually, you’ll see “X% coinsurance” – so, if your plan states a “100% coinsurance” that means that you, as the policyholder, is responsible for 100 percent of the procedure out-of-pocket.
Insurance plans usually set coinsurance amounts at 20 percent or 30 percent. These are also capped at a certain amount per benefit period which is called your “coinsurance maximum”. For instance, assume that your coinsurance is 20 percent, and that your coinsurance maximum is $5,000. Even if you had an $80,000 medical procedure, you’d still only pay $5,000 at most, instead of $16,000. The bill for $16,000 would be 20 percent of the costs, but it would exceed your $5,000 coinsurance maximum. Your insurance plan would pick up the remaining costs.
How Is Coinsurance Different from Copay?
A copayment or copay is a fixed payment that you owe for certain medical services. Unlike coinsurance, the size of a copayment doesn’t depend on the cost of the service. You can read more about copayments here.
Taking the Next Steps
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