You just got a $200 bill from your doctor but you have health insurance. What’s going on? You’ve just been billed for your coinsurance: the percentage of the doctor’s bill you owe after your insurance company paid the first 80%.
Whether you have private insurance or medicare, figuring out how to budget for your 20% of the coinsurance is essential. This keeps your health care costs manageable.
What is Coinsurance?
When you have an 80/20 split coinsurance, instead of having mostly set co-pay amounts, you pay 20% of any bill (that is not covered as preventative medicine or fulfilling part of your deductible).
This can be unpredictable because doctor’s don’t typically tell you upfront what your appointment and testing costs will be. And you’ll simply owe 20% of that. If the number ever comes in higher than you expect, ask them about working out a payment plan.
What Is Covered Under My Plan for Free?
Under many plans, routine care does not come with a coinsurance charge. These are things like check-ups, vaccinations, prenatal care, and dental cleanings.
These preventative measures keep you healthy and reduce your medical costs in the long run. Insurance companies are happy to shoulder the costs to prevent more expensive future conditions.
Take advantage of all of your routine appointments to get the most value out of your coinsurance. These appointments may let a doctor discover issues early and perhaps handle small problems at a routine appointment, rather than escalating the issue to an expensive specialist.
What Is a Deductible?
A deductible is an amount you are responsible for simply out-of-pocket before your coinsurance begins to apply. These reset at the beginning of each insurance period.
If you have a $1000 deductible, you will be responsible for the complete cost of the first $1000 of medical bills you have in a year. Your coinsurance will kick in after you have met your deductible.
What’s My Out-of-Pocket Maximum?
Your plan likely has an out-of-pocket maximum – the limit that you will pay out-of-pocket during the insurance period. You will be responsible for 20% of bills up until that point. These maximums can be quite high, so it’s important to understand what you will be responsible for if you have an upcoming expensive procedure.
Similarly, your out-of-pocket maximum will not be affected by costs that are not covered by insurance. Cosmetic surgeries or visits to a naturopath that are not covered in your plan will be a separate charge completely and have no bearing on your maximum limit.
What to Look for When Buying Health Insurance
When purchasing health insurance, you want to purchase a plan that makes sense for you. If you expect to have a high level of bills due to a pre-existing condition, choosing an 80/20 coinsurance with a lower deductible makes sense as you will likely use it anyway.
If you typically have low health care costs, choosing a lower premium, higher deductible coinsurance makes sense. However, remember you will be responsible for the deductible plus your 20% of the coinsurance should anything happen.
To learn more about how 80/20 coinsurance works with the other costs you can expect, get in touch.