Can you explain the difference between a copayment and coinsurance?
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Asked May 14, 2012
In order to manage the costs of health insurance, most health plans include one or more methods of placing some of the cost or medical care back on the insured. The two most common methods are through the use of copays and coinsurance. The company uses other methods of cutting costs as well, but these two are important because they have an effect on your actual cost of health care, in addition to the cost of the premiums themselves. After learning about copayments and coinsurance, you may be interested in other ways health insurance companies try to manage costs.
Copayments are the portion of each medical procedure or doctor visit you are required to pay out of pocket. Each procedure has a specific copay amount assigned to it, typically based on what the procedure costs, and the person receiving health care is going to be expected to pay that amount at the time of the visit. For example, if the visit has a copay of $20, you are expected to pay that much before leaving the care facility and the facility may not bill the insurance company until copays have been satisfied.
Coinsurance is the percentage of medical care you must pay yourself. If, for example, your doctor visit was to a physician who was not in your HMO network, the health plan may require you to pay a 25% coinsurance. This means that you must pay for 25% of the total procedure cost at the time the care is given, and then your insurance company will pay the remaining 75%. Coinsurance is generally used when going outside of the plan network, but it can also be applied to specialist procedures within the network. Being required to pay coinsurance and copays is unusual, but could happen under certain circumstances where the necessary care is outside of the scope of the plan.
Answered May 14, 2012 by Anonymous