Many Americans do not understand how health insurance and medical billing works. They are often caught off guard by high medical bills. In fact, roughly 2 out of 3 Americans worry about receiving an unexpected medical bill.
There are so many factors that go into the patient’s financial responsibility. Health insurance elements like deductibles and coinsurance play a large role. Did you know that the average family deductible in Texas is over $4,100?
Read on for a detailed explanation of how coinsurance works. Explore the 80 20 health insurance plan that is so common across the United States.
What Is 80 20 Health Insurance?
In the health insurance industry, sharing costs is critical to keeping the industry afloat. Your health insurance is viewed as a partnership between an insurance company and member.
For the 80 20 health insurance plan, this means that the provider is responsible for 80% of the medical bill. The member, on the other hand, is on the hook for the remaining 20%.
There are other factors to consider when calculating the 80 20 split between the insurance company and member. Continue reading to learn what factors impact the coinsurance rate.
What Factors Determine Coinsurance?
When you go to the doctor, the office submits a claim to your insurance company. Included is a medical billing code that informs the insurance company what the doctor performed at the appointment.
Each year, the insurance company negotiates the cost of each procedure, test, or evaluation. However, this negotiated price only applies to medical providers that are considered in-network. The cost is going to be higher for medical providers that are out-of-network.
Deductibles are another major factor in determining the patient’s responsibility. Coinsurance rates do not kick in until the patient’s deductible is reached. This means that the patient is responsible for 100% of the negotiated cost.
Consider that the patient has a $1000 deductible. Ultimately, the patient needs to pay $1000 out of pocket first. When this threshold is hit, coinsurance now applies and the insurance company begins to share health care costs.
The coinsurance rate may vary depending on whether you are in or out-of-network. Typically, insurance companies cover a small percentage when you are receiving care out-of-network.
This is why it is so important to verify that a doctor is in-network before receiving care. Most insurers have a provider directory on their website so that you can find in-network doctors and facilities. Otherwise, you should verify over the phone before you arrive for an appointment.
Another factor that impacts total cost is the copayment. Most insurance companies require a copayment when you visit a primary care physician or specialist. The copayment is in addition to your coinsurance responsibility.
Coinsurance and Your Health Insurance Plan
Coinsurance is common for the vast majority of Americans. It is imperative that you know how it works so that you are not caught off guard by medical bills.
The 80 20 health insurance plan is typical and leaves the patient with 20% of an in-network bill. If you want to learn more about the 80 20 health insurance plan, contact us today to speak with a specialist.