How to Calculate Co-Insurance
To address the issue of increasing health insurance costs, most insurance carriers have created managed-care plans that place additional financial responsibility on the covered members. These plans, commonly referred to as “co-insurance plans,” have a lower monthly premium but present you with a significantly higher monetary outlay if you actually require treatment. The term “co-insurance” refers to the percentage of treatment costs that are paid by your health insurance company. In a traditional HMO plan, the co-insurance is typically 100 percent, indicating that the carrier will pay the entire cost of your treatment, minus your copay. In a co-insurance HMO plan, the carrier will only pay a pre-determined percentage of treatment costs, usually between 50 percent and 90 percent, leaving you responsible for the remaining balance.
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Instructions
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1
Examine your health insurance policy contract. Locate the section of the benefit summary that describes the insurance carrier’s co-insurance percentage. This information should be clearly defined and easy to locate on the benefit summary page.
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Examine your treatment invoice. Locate the total balance due for the treatment you received. Review the invoice to ensure any copay amounts or other credits have been properly applied.
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3
Determine the insurance carrier’s responsibility. Multiply the entire balance due by the co-insurance percentage to determine your insurance carrier’s portion.
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4
Calculate your portion. Subtract the insurance carrier’s co-insurance portion from the total balance due to determine the amount of the invoice that is your responsibility.
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Tips & Warnings
Most co-insurance plans have a maximum out-of-pocket figure built into the health insurance contract. This is designed to protect you against an outrageously high medical bill that you are unable to pay. If the combination of your deductibles and co-insurance amounts meets or exceeds the maximum figure noted in your health insurance policy, the insurance carrier will pay 100 percent of your treatment costs for the remainder of the policy year.
Most co-insurance plans also have deductibles that must be met before the carrier will contribute any money toward your medical treatment. Subtract the amount of your deductible from the total balance due before applying the co-insurance calculations.
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