Differences between Deductible and Coinsurance
Here will discuss about what is coinsurance in health insurance with example and also its difference with deductible. Many health plans need both coinsurance and deductible. Knowing the difference between them is so important. Understand on what you will be indebted when you use the health insurance is essential part in having the health insurance. Coinsurance and deductible are kinds of the health insurance which cost sharing. You will pay the part of the cost of health care and the health plan will pay the cost of your care. The difference is on how they work, how much you should pay and when you have to pay.
What’s a Deductible?
A deductible is a permanent amount you have to pay each year. You pay as long as before your health insurance are already full. Once you pay the deductible, your health plan start to take the share of your bills on health care. This is the example of the illustrations. You have deductible $2,000. Then you get flu in January and you go to the doctor. The bill to the doctor is $200. Moreover, you have to responsible for all bill because you haven’t paid the deductible in this year. You have to pay $200 to doctor’s bill, and then you have $1,800 leftover to go for your yearly deductible. In addition, in March, you fall and break your leg. The doctor’s bill is $3,000. You pay $1,800 of the bill just before you finish paying the yearly deductible of $2,000. Now, your health insurance will work in and they help you to pay the rest of the bill. In April, you need to remove the cast and the bill is $500. Because you have already finished paying the yearly deductible, and then you don’t need to pay more toward your own deductible. That’s your health insurance’s job to pay the full share of that bill. However, from this case doesn’t mean your health insurance will pay the entire bill and you don’t need to pay even one cent. No, although you have already paid and met your deductible for that year, you still owe the copayment or coinsurance. After this, we will talk about what is coinsurance in health insurance with example.
Coinsurance is another kind of cost-sharing. It means you have to pay for some part of the cost of your care and some other part of the cost are paid by your health insurance for your care. Using coinsurance, you will pay a variable amount and a percentage of the health care bill. Here about what is coinsurance in health insurance with example and illustration. Well, let’s say you are asked to pay 30% coinsurance for the medical prescription. You fill the prescription for a drug which cost $100. Then you will pay $30 of the bill and your health insurance will pay the rest which is $70. Because coinsurance is a percentage cost of your care, if your care is so much expensive, then you have to pay a lot as well. For instance, if you have a coinsurance of 25% for being hospitalized and your hospital bill is $40,000. Then you will owe the coinsurance $10,000.
Coinsurance is available in most of health policies. Sometimes people misspell the coinsurance as co insurance. Just like stated before, coinsurance is the percentage amount that you need to pay for your health insurance bill. When you file a claim for your health insurance then you should pay the bill based on the coinsurance you already decide. The percentage of coinsurance is normally in addition to deductible. The deductible should be paid first before the company of insurance will pay anything. Here are other examples. Alan had a coinsurance 20% on his new health insurance policy. For his recent surgery, he received the bill from the health insurance company. The total amount of the bill was $2000. He paid the insurance deductible was $200 for that year. Moreover, he hadn’t paid the deductible since the surgery was the first time he claimed. This means Alan have to pay, form his own pocket, his full deductible which is $200. Then the he should also pay 20% of the left amount of the insurance bill which is $360. At the end, Alan have to take money from his pocket $560 that’s from $200 plus $360 for his surgery bills. That’s about what is coinsurance in health insurance with example.
Deductible and Coinsurance—How Are They Different?
Simply it can be said deductible ends but coinsurance works on and on. Once you already have paid your deductible for that year, you will not owe any payment for deductible until another payment in the next year. However, you still have to pay other cost-sharing such as copayment or coinsurance. Your deductible is done only for one year and pays again another year. You will continue to pay coinsurance every time you get medical treatment or health care service. You can stop paying for coinsurance, when you reach the maximum of out-of-pocket from your health insurance policy. However, this is unusual and can only happen when you have so much high health care costs.
Deductable has fixed amount while coinsurance are various in its amount. Your deductible has permanent amount, but the amount of your coinsurance is variable. If you’re deductable is $1,000 then it will always $1,000 you have to pay no matter on how expensive or cheap the bill is. The fixed amount of deductable will be enrolled when you first have a health plan. That’s different from coinsurance. Although at the beginning you know the percentage rate of your coinsurance, but you don’t know the amount you owe to pay the bill. You will know it once you receive the service and get the bill. The bill will be different from time to time you get the medical service. That’s why we can say that coinsurance is variable. The higher the bill, the more you have to pay the coinsurance. Coinsurance is riskier for you since you can’t budget it in your yearly or monthly plan. For instance, if you have surgery and the bill is $20,000, your coinsurance 30% then you have to pay $6,000. So you need to consider the amount of your coinsurance regarding on what is coinsurance in health insurance with example.