First, What Is The Official Definition Of Co-insurance?CoinsuranceOnce You Have Met Your Deductible, You Pay Coinsurance For Additional Medical Care. It Is A Percentage Of The Billed Charge. For Example, Your Insurance Company Might Pay 80, And Then You Would Pay 20. It Is Similar To A Co-pay, But Is A Percentage Instead Of A Dollar Amount.Now, Let's Dig A Little Deeper. With California Health Insurance, It Is Common To Speak Of Their Plan As An 8020 Plan Or A 7030 Plan. They Are Essentially Referring To The Co-insurance Part Of It. With The 8020 Example, The Health Carrier Is Picking Up 80 Of The Charges And You Are Picking Up The Remaining 20. If There Is Any Kind Of Deductible, You Must Pay That First At 100 Until Met.Let's Take An Example And See How California Health Insurance Plans Essentially Break Down Into Three Main Stages.Stage 1 - The Deductible YOU PAY 100Let's Say You Have A 500 Deductible. Except For Services That Are Separate From The Deductible (usually Office Visits And Prescriptions...see COPAYS), You Will Pay The Discounted Charges At 100 Until You Meet Your Deductible. You Can Find More Information On Deductibles.Stage 2 - The Co-insurance YOU SHARE A PERCENTAGEOnce The Deductible Is Met, You Then Start Sharing The Cost With The Carrier. Let's Say Our Plan Is 7030 And The Charge Is 1000. You Pay The First 500 (deductible) And Then You Pay 30 Of The Remaining 500...or 150. Of The First 1000 Charge, You Would Pay 650 Out Of It. If You Have Another 1000 Charge In That Same Calendar Year, You Would Pay 30 Of The 1000 (or 300) Since Your Deductible Was Already Met. When Do You Stop Paying The 30??Stage 3 - The Max Out Of Pocket THE CARRIER PAYS 100Once You Have Met Your Max Out Of Pocket (sometimes Called The Copay Maximum), The Carrier Will Then Pay 100 Of Covered Benefits, In-network. For Our Plan Example, Let's Say We Have A 500 Deductible, 7030 Co-insurance, And 5000 Max Out Of Pocket. If We Get A 50,000 Bill In A Calendar Year, You Pay The First 500, Then 30 Until You Reached Another 5000 Out Of Pocket. For That 50K, You Would Pay 5500 And The Carrier Would Pay 45,500. Co-insurance Is Nice But The Real Reason To Have Health Insurance Is The Max Out Of Pocket.Co-insurance Usually Applies To Services Outside Of The Office Visit And Prescriptions. You Will Typically See The Same Co-insurance Percentage For Hospital, Lab, Surgery, Emergency (sometimes Has Separate Additional Copay) And Physician Services.It's Important To Stay In Network For PPO Plans. Let's Say You Have 7030 Plan And You See A Doctor Out Of The PPO Network On A Non-emergency Basis For 1000 Of Services And Your Deductible Is Already Met (you're In Stage 2). Two Things Will Probably Happen. The Health Insurance Plan Will Probably Have A Separate Percentage For Out Of Network...let's Say 5050 Instead Of 7030. Also, The Carrier Will Apply This Lesser Percentage To What They Would Pay An In-network Provider. For Example With The 1000 Charge, Perhaps The Contracted PPO Rate Is 600 (discount Is Usually 30-60). The Carrier Would Then Pay 50 Of The 600 Or 300 Of The Total 1000. You Pay 700. Compare This With The 30 Of 600 You Would Pay For An In-network Provider. 700 Versus 180 Out Of Your Pocket. Use In-network Providers!
