Co-pay? Deductible? Co-Insurance? I pay those three plus paying my monthly premium? That doesn?t sound fair!
A co-pay is the amount of money you pay when you are seen by a doctor. A doctor visit may cost $200 but if you have a $10 co-pay option, then all you pay is $10.
If you don’t have a co-pay option you will pay the full $200 and that amount will be applied to your deductible. In fact you will pay for all of your medical bills up to the amount of your deductible. If your deductible is $1,000 then, only after you have paid $1,000 for medical services will the insurance start covering costs for you.
Well, what happens after you reach the deductible? Then you split costs with your insurance company up to the co-insurance limit. Say you had a serious leg injury falling off your motor-bike. The total medical expenses came to $8,000. You do not have a co-pay but you do have a deductible of $1,000. This means you pay the first $1,000 of medical bills. The remainder now is $7,000. You have a 90/10 co-insurance benefit up to $5,000. This means that you will pay 10% of the next $5,000 in costs or $500. The insurance company will pay 90% of $5,000 which is $4,500. So now you have paid $1,5000 ($1,000 deductible + $500 co-insurance = $1,500). The total medical bill was $8,000 but $6,000 has not been covered. The good news is that the insurance company pays the remaining $2,000. And if the bill was $20,000 the insurance company would pay $14,000. The insured’s responsibility – Co-Pay, Deductible, and a Percentage of the co-insurance.
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