What do they mean by coinsurance

When you are selecting your health insurance policy, you might have several choices, including a few plans with the option of coinsurance. Before you purchase a new policy, it's important to understand exactly what coinsurance is. With coinsurance, even when you have health insurance , you will still be responsible for paying for a portion of the cost every time you receive healthcare services, whether it's a healthcare provider's appointment, test, hospitalization, or individual drug prescription.

Your coinsurance responsibility is usually a percentage of the total cost for each instance of care. When you have choices of different plans, your premium differs based on factors such as coinsurance, deductible, and copay. The higher the percentage you are expected to pay when you need healthcare services, the relatively less expensive your monthly premiums should be.

High coinsurance usually means lower monthly premiums. Coinsurance typically contributes to your deductible. Once you have reached your deductible, you may no longer have any responsibility for coinsurance for the rest of the term of your policy—which is usually through the end of the current fiscal year.

In addition to coinsurance, there are other costs that you have to pay for your healthcare coverage, and it helps to know the difference between coinsurance and your other costs. Coinsurance differs from these other costs because your coinsurance cost is usually a percentage of your care, while the other costs are a set amount. Your coinsurance is usually a percentage of the cost of your healthcare services—so you may be required to pay 25 percent of the cost of your X-ray and surgery.

Be sure to consider the approximate cost of coinsurance when you are figuring out which healthcare insurance plan to choose, either as an individual policy or during open enrollment if you get your insurance through your employer.

The out-of-pocket cost of coinsurance can discourage you from seeing your healthcare provider or seeking treatment, so consider that when you are selecting your insurance plan. It can be hard to predict your healthcare needs for the upcoming year, and you may decide to try one type of plan one year, and another the next to see what works best for you and your family.

Sign up for our Health Tip of the Day newsletter, and receive daily tips that will help you live your healthiest life. You will probably end up paying a bit more upfront in monthly premiums, but you may end up saving money in the long run.

The second option requires you to purchase health insurance through the marketplace. So, make sure to explore all your options.

FirstQuote Health can also help you find a plan with coinsurance rates that fit your needs. If you want to easily compare health insurance rates in your area, all you have to do is type in your zip code to see what quotes are available. By getting started now, you can get covered as early as today.

Providers Health Plans Family. Affordable Plans. News and Advice Trumpcare Watch. The advantage of a copay is that it allows for greater predictability for the consumer, and they are generally more affordable.

With a copay, you know you will pay a set amount to see your doctor for any reason. Let a licensed HealthMarkets agent help at no cost to you. In some cases, your plan might charge a copay for one type of service and coinsurance for another.

To fully understand how out-of-pocket expenses work, there are three additional terms to learn: deductibles, out-of-pocket maximums, and annual limits. A deductible is a set amount that you must first pay before your insurance company begins chipping in its part. Once that number has been reached, your insurance company would begin paying its portion of the bills.

Deductibles do not apply to all services. Many health insurance plans will cover routine services and even prescription drugs. In fact, the Affordable Care Act mandates that preventive care, like yearly exams, mammograms, and immunizations, not require payment toward a copay, coinsurance, or deductible. Though less common, there are also health insurance plans without deductibles. Deductibles are a key difference between copayments and coinsurance.

Copays are usually required both before and after reaching a deductible. Some health plans count copayments toward the deductible and others do not. Once you reach that limit, the insurance company bears the remainder of any costs for the rest of the year.

Deductibles, coinsurance, and copays all count toward your out-of-pocket maximum. Think of an annual limit as the opposite of a deductible. An annual limit is the most amount of money that a provider will pay for medical bills in a given year.

After the annual limit is reached, the policy holder will again be forced to pay for all of the medical costs just like they were before reaching their deductible. Fortunately, the Affordable Care Act now prohibits insurance providers from placing annual dollar limits on most health benefits for employer-based and individual health plans, though there are exceptions. And under the ACA, these 10 essential health benefits may not be counted against an annual limit. Then, you will pay only a percentage of the costs while the insurance company covers the rest.

With a copay, it's easy to know how much you can expect to pay for a certain type of service or treatment. But because coinsurance is a percentage of the service, it can be harder to predict your out-of-pocket costs. Some plans offer the same rate for all services.