Deductible, Co-payment, and Coinsurance Differences.

By: Taylor


It can be easy to become confused when it comes to identifying the differences between some of the terms in the medical insurance field. For instance, deductible, co-payment and co-insurance are typically often confused. Each of these three terms have their own unique set of properties and differs from the others. In order to help you understand these three terms, we’ve outlined them below.

Deductible

A health insurance deductible is a fix dollar amount which you will be required to pay out of pocket prior to any medical insurance policy kicks in and begins paying for medical care. Based on your insurance coverage, your deductible can range from $0 to thousands of dollars.

Deductibles can also be paid on a per injury or per illness basis, and can also be on a per certificate tenure. Typically, of the insurance deductible amount is high the premium payments on the policy will be lower. Transversely, if the deductible amount is low, the premium payments on the policy will be higher.

Coinsurance

Coinsurance is typically given as a percentage. It symbolizes the percentage expense which you would have to pay as well as the percentage the insurance company will pay for your eligible medical expenses. Usually a deductible is used in combination with coinsurance – in this case you would have to pay the entire deductible amount and then the remaining coinsurance amount. Some examples are as follows:

Coinsurance at 80% – 20% – The insurance policy will cover 80% of covered medical costs leaving you the remaining 20% to pay out of pocket.
Coinsurance at 90% – 10% – The insurance policy will cover 90% of covered medical costs leaving you the remaining 10% to pay out of pocket.
Coinsurance at 50% – 50% – The insurance policy will cover 50% of covered medical costs leaving you the remaining 50% to pay out of pocket.
Copay (Co-Payment)

Medical co-payments are the out of pocket costs that you have to pay when medical services are used. This includes medications and prescriptions, durable medical equipment, and more. Co-payments begin after you have met your deductible amount. As an example, you may have a $1000 deductible and $15.00 co-pay for office visits. You will pay full price – out of pocket – for the full cost of all medical services – including office visits. Once you have paid the $1000 each year, office visits will cost you only $15 each time.

Your Policy

In many insurance policies you may find a combination or inclusion of all three of the above. On the other hand, your plan may not be comprised of a deductible, copay or coinsurance. That’s how varied health insurance policies are. If you have questions about your health insurance policy speak to your policy administrator.

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