Deductibles, copayments, and coinsurance are covered by what type of plan?

Coinsurance is the amount you are required to pay for a medical claim, apart from any copayment or deductible your health plan may have. In 2021, 68% of covered workers had coinsurance. 

Health insurance plans typically have cost-sharing features. Cost-sharing means that you pay a portion of your medical expenses and the health insurer pays its portion of your medical expenses. Coinsurance is one form of cost-sharing. Deductibles and copayments are two other common forms of cost-sharing.

• Deductibles are a dollar amount you have to pay for most covered medical services before your health plan pays any amount.
• A health insurance copayment is a dollar amount you have to pay each time you receive a covered medical service.
• Coinsurance is the percentage of the medical expense you and the insurer each pay for services covered by the plan.

In coinsurance arrangements, usually, the percentage the insurer pays is higher than your portion. For example, if you read that a health plan has an 80% / 20% coinsurance, that means the insurer pays 80% of the allowed medical expense, and you pay 20% of the allowed medical expense. 

The same principle applies if the coinsurance is different. For example, if a plan provides 50% / 50% coinsurance, the insurer pays half of the allowed medical expense, and you pay the other half. Obviously, in this case, your out-of-pocket expenses are greater than in the scenario where the plan covers 80% of the medical expense.

Consider this scenario. If your health insurance plan has an 80% / 20% coinsurance requirement (and does not have any additional copayment or deductible requirements), then a $100 medical claim would cost you $20, and the insurer would pay the remaining $80.

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nts), then a $100 medical claim would cost you $20, and the insurer would pay the remaining $80.

How Coinsurance & Other Insurance Cost-Sharing Works

Coinsurance is a cost-sharing measure similar to copays and deductibles in so far as all three features involve specified costs you pay for medical services covered by your health insurance. Many health insurance plans have all three cost-sharing features. For example, you might have a health insurance plan that has a $1,000 annual deductible, an 80% / 20% coinsurance that applies to all covered services, and a $6,000 out-of-pocket maximum cap on your annual expenses for covered medical care and services.

To illustrate how coinsurance and the other cost-sharing features of your health insurance plan work, assume the first time you use your health insurance during the year is when you are admitted to the hospital. You incur $50,000 in medical expenses from the hospital.

1. You pay your $1,000 deductible. That leaves you with $5,000 of financial responsibility for covered medical expenses before you reach the plan’s maximum out-of-pocket cap of $6000 for the year.
2. With 20% coinsurance, you pay $1,000 for every $4,000 the insurer pays. That means for the next $25,000 in covered medical expense, you pay $5,000 and your insurer pays $20,000.
3. Once you’ve paid your $1,000 deductible and $5,000 in coinsurance, you’ve reached your $6,000 out-of-pocket maximum for the year. Altogether, you pay $6,000 with this medical bill, and your insurer pays $44,000. It’s likely you will not have to pay coinsurance for covered services for the balance of the year.

Because cost-sharing varies from one health insurance plan to another, you’ll want to make sure you understand the details of your health insurance plan before you need to use your coverage. By doing so, you can anticipate the portion you will have to pay for your medical care.

Coinsurance & Prescription Drugs 

Coinsurance also applies to prescription drugs. For example, if you have an 80% / 20% coinsurance split with your health insurance company, you will be responsible for 20% of the total cost of your prescription drugs. 

This means that if you go to the pharmacy and have to pay $100 for your medication, the insurance company will cover $80. Then, you will be responsible for paying the other $20. It is important for you to take a close look at your health insurance policy to ensure you adequately understand when you have to pay for your prescription drugs and how much money you have to pay.

When Do You Pay Coinsurance?

Typically, your coinsurance kicks in once you’ve paid your deductible. For example, if you have a deductible of $1,500, you will start paying coinsurance after you meet you’ve paid that amount in medical costs. 

Many insurance companies have different deductibles and co-pays that apply to outpatient visits versus hospital stays and other types of care. Make sure you understand the details of each component of your health insurance and do not hesitate to reach out to a professional if you have questions. 

Have Medicare? Read our article that answers, “what Is the difference between Medicare coinsurance and copayments?”.

Does Coinsurance Count Toward Your Out-of-Pocket Maximum?

You might be wondering, “how does my out-of-pocket maximum work?”. This refers to the maximum amount of money you have to pay out-of-pocket. Coinsurance counts towards your out-of-pocket maximum. 

Once you have met your out-of-pocket maximum, you should not have to pay coinsurance anymore. Your health insurance company should be responsible for all remaining expenses. If you have questions about coinsurance and your out-of-pocket maximum, you should reach out to a professional affiliated with your insurance plan.

If you go through eHealth to find health insurance, our licensed insurance agents are available to help you before, during, and after to make sure you understand your policy. 

How Do You Find Out What Your Coinsurance Costs Will Be?

There are several ways you can find out what your coinsurance costs will be, but you first have to check and see what percentage of your medical bill you are responsible for. You can find those details in the documentation for your insurance plan. This number will be used to figure out your individual medical costs.

For example, if your policy says your coinsurance is 20%, that means you are responsible for 20% of the bill. Remember that coinsurance will only kick in after you have already met your deductible. Then, you will continue paying coinsurance until you hit your out-of-pocket maximum. Once you hit your out-of-pocket maximum, you should not be responsible for any further medical expenses.

In 2021, the average coinsurance rates for covered workers were 19% for primary care and 20% for specialty care.

It can be confusing to find this number in your medical plan information, so you should reach out to a professional who can help you if you need clarification.

Coinsurance Based on Plan Tiers

ACA-compliant health insurance plans are usually divided into metal levels. Depending on the metal tier your plan falls into, how much your provider covers versus how much you’re expected to pay will vary. Here’s a general overview of how this typically works:

• A bronze plan is expected to cover approximately 60% of your health expenses.
• A silver plan should cover approximately 70% of your plan’s expenses.
• A gold plan should be responsible for covering approximately 80% of your health expenses.
• A platinum plan should cover approximately 90 percent of your medical expenses.

If you have questions about how coinsurance and health insurance tiers work, we can help you find the right healthcare coverage to meet your needs. A member of our team is always standing by to assist you, and we will work with you carefully to make sure you have the right health insurance coverage. Reach out to us today. 

Pros and cons of high vs. low coinsurance plans

Pros of high coinsurance plans

Low Monthly Premiums. Most high coinsurance health plans tend to have lower monthly premiums. If you anticipate only needing preventive care, which is covered at 100% under most plans when you stay in-network, then the lower monthly premiums that often accompany high coinsurance plans may help you save money.

Cons of high coinsurance plans

Costly Out-of-Pocket Medical Expenses. If you choose a high coinsurance health insurance plan, you’ll pay more for covered healthcare services out of your own pocket than if you chose a low coinsurance health plan. It’s common for high-coinsurance plans to also have high deductibles and, if so, you may find that you are paying 100% of medical care expenses far into the year until you have met your deductible.

Additionally, you could incur substantial expenses if you frequently see your primary care doctor and specialists for treatment of a chronic condition or if you are hospitalized for an unexpected illness or injury. With a high coinsurance health plan, predicting and budgeting for the healthcare expenses you will likely pay during the year is more challenging because your cost-share is greater.

It’s important to consider your personal health needs and financial circumstances before deciding on a high-coinsurance or a low-coinsurance health plan.

Where to find affordable health insurance

At eHealth, we appreciate your desire to have affordable health insurance that provides the level of coverage you need. We are here to help you find the right plan to meet your needs. Explore your individual and family health insurance options and compare plans easily with eHealth. You’ll be able to compare premiums, cost-share, benefits, and maximum out-of-pocket limits. eHealth’s team of licensed insurance brokers is also standing by to help you better understand your options.

Related Articles

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• Copay and Copayment for Health Insurance
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