It’s not always clear exactly what your health insurance plan covers when fees and ending costs can feel like they’re hidden behind complex industry terms. So tackling understanding what they mean is important to knowing and using your benefits.
The below terms are all forms of “cost-sharing,” which is when medical services are paid by both the member and the health plan.
Copay — A fixed amount a person pays for qualifying types of services, such as office visits, specialist visits, prescription drugs or other procedures. For example, a member may have a $25 copay for an office visit with a primary care physician and a $40 copay for a specialist. All copays are fixed and detailed in the summary of benefits at the beginning of the plan and can be charged before and/or after a person has reached his or her deductible.
Deductible — The amount you pay for covered services before the insurance company begins to pay. For example, if you have a $2,000 deductible you will pay 100 percent of all eligible expenses until all the bills total $2,000. Once the deductible is paid, you will owe only any copays or remaining coinsurance for covered services. See Also: an article on embedded vs non-embedded deductibles.
Coinsurance — Paid after a person has met his or her deductible, it is a percentage of the allowed amount for services. For example, you have a coinsurance of 20% and the allowed amount for lab work is $100. If you have paid your deductible, you will owe 20% of the allowed amount of $100, or $20. If you have not paid your deductible, you owe the full amount of $100. Not all plans have coinsurance.
It’s important to be sure you understand your benefits when you receive your plan documents. All health insurance plans come with a summary of benefits, which includes informations on all copays, deductible and/or coinsurance. If you have additional questions about your plan, it’s best to contact the health insurance company directly.
You may always find contact information on your member ID card.