The 5 Basics of Health Insurance: Coinsurance
EPISODE 1: DEDUCTIBLE
What is Coinsurance? Coinsurance can be described as “your share of the costs of a health care service.” This is a tricky process that is commonly heard and understood as an 80/20 plan. When you hear an insurance policy being described as an 80/20 plan or a plan having 80/20 coinsurance, that means that the insurance company is paying for 80% of your medical bills and you are paying for the remaining 20%. But first before coinsurance kicks in, you have to pay the deductible first. This is an example of how your coinsurance would cover a medical bill If you had a plan with $5000 deductible, and 80/20 coinsurance. Once the $5000 deductible is paid out of your own pocket, then the coinsurance will kick in, meaning you would pay 20% of your medical expenses until you reach your out-of-pocket maximum (OPM). In other words, after your deductible you’re splitting the cost of medical services with your health insurance until you reach your out-of-pocket maximum. Then after you reach your OPM, your health insurance would cover 100% of the rest of your medical bills. So the deductible plus coinsurance will equal the OPM.
If you have any other questions or would like to schedule an appointment, click the link below to Talk to Tim.