Coinsurance is a fancy name for cost sharing between your major medical insurance company and yourself. Let’s do a quick coinsurance Q & A:
- When do I encounter coinsurance?
- Coinsurance is typically encountered after the plan deductible has been met
- What are typical values of coinsurance?
- Typical values are 80/20, 70/30 and 50/50. The insurance company is paying the higher percentage and the insurance pays the lower amount. The exception being 50/50 coinsurance which is an even split.
- How long does coinsurance last?
- Coinsurance lasts for a specific dollar amount. As an example, after the deductible has been met, on the next $15,000 in medical charges the insurance company pays 80% and you pay 20%. So your financial exposure during the coinsurance period is $3000.
- Does each person covered by the plan have a coinsurance obligation?
- This varies from company to company. With some companies everyone has a coinsurance obligation if they meet their deductible. With others, the maximum coinsurance is two coinsurance periods per family, which can be met individually by two people or as a combination of all family memebers coinsurance contributions. Remember an insured first must meet the deductible before contributing towards the coinsurance obligation of the plan.
- What happens after the coinsurance obligation has been met?
- If a single person has met their coinsurance obligation, that person’s medical expenses are now covered 100%. If a families coinsurance (and deductible) obligations have been met, the families medical expenses are all covered 100% by tine insurance company. Keep in mind, if an expenses is not covered by the policy, then they do not contribute towards meeting the plan deductible or coinsurance and will not be covered by the policy.
Let me know other coinsurance questions you may have. In the future we’ll discuss plan deductibles and the phrase “out of pocket” and “out of pocket maximum”.