Deductible, coinsurance, copay—in the world of health insurance, what do all of these terms mean? More importantly, how do they affect you and your healthcare budget? When shopping for a health insurance plan, understanding these terms can help you choose a health insurance plan that will work for you.
Deductible, Coinsurance, and Copay: What’s the Difference?
Your deductible, coinsurance, and copay are considered out-of-pocket costs. In other words, they are health care expenses that you are responsible for. However, the ways in which they function are much different.
A deductible is the total amount that you must pay before your insurance company begins contributing. For instance, if you have an insurance plan with a $2,000 deductible, you will be responsible for 100% of your healthcare costs until those costs reach $2,000. Once your $2,000 deductible is met, your insurance company will begin sharing the costs of your health care services, usually through a copay or coinsurance.
Coinsurance is a way for you to share your health care costs with your insurance company. Your coinsurance can be anything from 50/50 to 80/20 depending on the type of insurance policy you choose. In the case of a 50/50 coinsurance, you will pay half of your health care expenses, while your insurance company pays the other half (once your deductible is met, in most cases). This means that a $500 procedure will only cost you $250 and the other $250 will be paid by your insurance company. In the case of a 80/20 coinsurance, that same $500 procedure will only cost you $100, and your insurance company will pay the other $400.
A copay is a flat fee that you pay for certain health care services once you have met your deductible. If your copay for a general’s doctor’s visit is $20, you will pay your $20 copay at the time of your visit rather than the full amount of the visit (which could run into the hundreds).
Finding an Insurance Plan That Works for You
Before choosing a health insurance policy, determine how much protection you would like to have against unpredictable healthcare costs and how much you will likely use your insurance. Knowing the ins and outs of a health insurance plan is crucial to choosing one that will work for your medical needs and budget. Below are some other things to consider:
- An insurance plan with a high deductible will usually have a lower monthly premium.
- A monthly premium is the amount you pay each month for your insurance plan.
- A plan with a low monthly premium usually means you will pay more in monthly premiums?.
Still have questions? Don’t worry. A licensed HealthMarkets Insurance Agency representative is available 24/7 over the phone to answer your questions and help you choose a plan that will work for you. Contact a representative today!