What You Pay: Part 2 – Coinsurance
Today, in Part 2 of our 3-part “What You Pay” series, we’ll talk about coinsurance. Last week we tackled premiums and how they impact your wallet. Coinsurance is another healthcare cost that you have to pay, but what exactly does it mean?
Many people hear the term coinsurance and think it’s the same thing as a copayment. We’ll explain to you today why that’s not true.
What is Coinsurance?
Coinsurance is the percentage you pay for covered healthcare services after your deductible has been met. You’ll often see coinsurance listed in groups of two numbers, like 70/30. That means your health plan pays the first percentage (70% in this example), you pay the latter (30%). Let’s look at an example to better explain how coinsurance works.
Example: Al Goes to the Doctor for a Medical Procedure
About Al’s Health Insurance Plan:
He had a medical procedure that cost $1,200 after his health plan network discount.
His health insurance plan has a $1,000 deductible. (He has to pay $1,000 before coinsurance kicks in.)
He also has 30% coinsurance. (He pays 30% and his health plan pays 70% of the costs after Al has met his deductible.)
How Much Does Al Pay?
If Al Still Owes His Deductible…
Al pays the full cost of his care up until he has paid his full $1,000 deductible. Once he has reached his $1,000 deductible, he ALSO pays 30% of the remaining charges.
If Al Has Already Paid (or Met) His Deductible…
Since Al has already paid his deductible, he simply pays his coinsurance on the full amount.
Where You Go For Care Makes a Big Difference
When you’re footing a percentage of the bill, the place you go for care makes a big difference. Look at the example below.
Here we used our pricing transparency tool to show a hip MRI and the range of costs between providers. You could either pay your coinsurance on $926 or on $5,491. You can see how choosing a fair priced provider can save you a lot of money.
Keep track of how much of your deductible you’ve paid. Your health insurance plan may have a tool to help with this, but beware of the 3-6 week lag. Make sure you don’t pay your whole deductible or a portion of it twice.
Choose a high-value provider. Most times, choosing a non-hospital provider is a less expensive option.
We’re seeing a shift from copayments to coinsurance for diagnostics like X-rays and blood work. Before, those types of services usually had a flat copay. Now, a lot of them have a coinsurance rate. Keep this in mind as you make your healthcare budget.
Join us next week for the last of our 3-part What You Pay series.