What Do "Co-Payment" and "Coinsurance" Mean?
Monthy premiums aren't the only factor in choosing a health insurance plan. Deductible, co-payments and coinsurance are all factors in how much a specific plan will actually cost. General health plays a role as well because it affects how much you will spend on co-payment and coinsurance.
Other People Are Reading
-
Definition of Co-Payment
-
A co-payment is a set amount you must pay when you get a particular service--such as an office visit, a trip to the emergency room or a prescription. Co-payments are common with managed care and health maintenance organization (HMO) plans. Usually a health care provider will collect the co-payment up front: in other words, you usually pay it on the day of service. It may not be the full amount you pay for that day's care.
Office Visit And Emergency Room Co-Payment
-
Office visit and emergency room visit co-payments are common. They are the share you pay simply for your visit on that day. Co-payments do not count toward your deductible, and after your insurance company gets the claim, you might have to pay additional costs. If the doctor orders tests or treatment while you are there, you are likely to end up having to pay additional money after the insurance company processes the claim.
-
Prescription Co-Payment
-
Prescription co-pay amounts typically are a "tier" system of lower, middle and higher co-payment amounts. Prescriptions that have a low retail price, such as generics and low-priced brand-name drugs usually are in the lowest tier. The other tiers, with higher co-payment amounts, are for higher-priced prescriptions. Prescriptions that are much costlier, such as some cancer-fighting drugs, can be off the tier system completely and instead of a co-pay, you pay a percentage of the retail price.
Definition of Coinsurance
-
Coinsurance is the amount you pay after the insurance company has reviewed your claim and paid their portion of the bill. Coinsurance is often expressed as a percentage. An 80/20 coinsurance means the insurance company pays 80 percent of the bill and you pay 20 percent. However, if you have a deductible--and nearly every plan does have a deductible--you must pay your deductible first before the insurance pays coinsurance. In other words, if you have a $1,000 deductible, you pay the first $1,000 and then coinsurance begins.
How General Health Affects Co-Payment and Coinsurance
-
If you are generally in good health and seldom need to see a doctor, an office call co-payment will probably save you money over the course of the year because the cost of an office visit is split between you and the insurance company instead of being applied completely to your deductible. But if you have a serious accident or an illness that requires many trips to the doctor's office, your co-payments could end up costing you more than you'd have spent if you had only paid toward your deductible before coinsurance kicked in. If you are having trouble making your co-payments because of a chronic or serious illness, you might be able to find assistance.
-
References
Resources
- Photo Credit doctor and patient 4 image by Paul Moore from Fotolia.com
