First of all co-insurance is not “co-pay.” Co-pay is the money you pay to the doctor in the USA for an office visit. Co-insurance is not “deductible.” The deductible is the amount of money you are required to pay for medical expenses before the insurance kicks in and starts providing reimbursement for medical costs.
“Co-insurance” is called “Co” because it includes a sharing of medical costs between the client and the insurance company. Co-insurance amounts are stated as percentages; for example, 90/10, 80/20, 70/30, 60/40, 50/50. The most common co-insurance percentage is 80/20. What this means is that the company will cover 80 percent of the medical expenses after the deductible, and the client will cover 20 percent of the medical expenses after the deductible. Almost always a cap is put on the amount that is to be covered by the co-insurance, usually $5,000 but sometimes $10,000.
So if you have an insurance plan with a $1,000 deductible and co-insurance at 80/20 with a cap at $5,000 in a worse case scenario you would need to pay out $2,000. Here is how it would work: You would obviously pay your $1,000 deductible. Then you would also pay 20 percent of the next $5,000, which would be $1,000. The insurance company would pay the other $4,000 and all expenses beyond $5,000.
Remember as your portion of the co-insurance increases, your monthly premium will drop. Thus a 50/50 plan will be less expensive than an 80/20 plan.
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