What Is a Coinsurance Payment?
Depending on your choice of health insurance, you may have to pay a certain amount before receiving the full benefits of your policy. Weigh your options when choosing a health insurance plan. Besides actual benefits and cost, consider any out-of-pocket medical costs you are required to shoulder before you enjoy the benefits of your policy.
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Health Insurance Cost
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In general, the higher the premium of a health insurance plan, the lower the out-of-pocket costs, which include co-insurance payments, required to utilize the benefits of the plan. Plans with more expensive premiums may not even require co-insurance in order to receive medical benefits.
Definition
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A co-insurance is a cost-sharing requirement under a health insurance policy that requires the insured individual to pay a percentage of the cost of any covered service. The amount or percentage appears on the policy. According to the Hereford Physical Therapy and Sports Medicine website, under Medicare Part B, a beneficiary must pay a co-insurance of 20 percent of the allowed charges. Many HMOs offer 100 percent insurance, meaning no co-insurance, for preventive care or routine care services, as long as they are provided within the HMO's network.
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Co-insurance vs. Co-payment
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The terms co-insurance and co-payment can often be confused. A co-insurance amount varies, usually from 10 percent to 30 percent. This depends on the services provided and the allowable amount for each service. A co-payment is a cost-sharing arrangement wherein the policyholder pays a flat amount for a specific service, such as a fixed amount for every office visit or for each prescription drug. This amount does not vary with the cost of service provided, unlike in a co-insurance, which is based on a specific percentage per cost of service.
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References
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