Definition of Health Coinsurance and How to Calculate
Even if you have health insurance, you should still pay for what it called co insurance definition medical. There are still some responsibilities you will pay for specific portion every time you need a medical care. You will pay for the doctor appointment, some tests you need individual drug prescription or hospitalization. So when you have health insurance doesn’t mean you are free from paying anything as all of them are paid by the insurance.
One type of the shared payment in health insurance is called coinsurance. Using coinsurance, the individual shares some of the payment for the bill or any claim with the insurance company. So you can be said that coinsurance is simply to the spread of an insurance plan within multiple parties.
Percentages of Coinsurance
In co insurance definition medical, coinsurance is typically bordered as the percentage of the total numbers of money asked to be paid. You are responsible for that percentage anytime you get the medical care. For example, you set the insurance at 80/20. It means that the insurance company will pay for the 80% of the total amount and you have to pay the leftover which is 20%. There is possibility for some insurance that they offer the coinsurance as much as 50%. Even, it may go up until as high as 100% to the total money of your deductible. This happens when you have a higher deductible or catastrophic health plan. However, the higher percentage you should be paid, the less pricey you will pay the monthly premium should be. If you pay more the individual service, that means you pay a little on the monthly premium.
How the Sharing Works
This is how co insurance definition medical works. When you visit the doctor for your routine procedure and you come up with the total amount of the bill from the visit is $125. You may have already paid copay for $25. Once it is applied, the copay lessens the original bill from $125 to $100. Then you have already set up your coinsurance is about 80/20. It means you should pay 20% of the remaining $100, so you are expected to pay for $20. Moreover, the total bill for the doctor visit is $25 copay and the additional $20 coinsurance then the total is $45.
Reasons for Coinsurance
There are some reasons why the insurance companies apply coinsurance. It is not only to decrease the amount of money they must pay on the behalf of your medical care. It is also to discourage you from not visiting the doctor or looking for treatment. They think that if you are expected to pay for some part of your medical treatment, then you will less likely to go the doctor. Different with most of copay, coinsurance has contribution to your deductible. Once you have reached and met your deductible, you don’t need to have any responsibility to pay the coinsurance anymore. The rest of policy terms, you are free from having coinsurance. That’s co insurance definition medical. Usually, the end of the term is the current fiscal year. So it’s better if you make sure to include the coinsurance cost when you figure out to choose which healthcare insurance. You should be considered to choose an individual policy and during open enrollment.
How to Calculate Your Health Plan Coinsurance Payment
Just like stated before, the health insurance will not pay all the medical treatment you get in case you need them. Instead, you should pay some part of the bill or cost of your care. In your health plan, you will see the requirements such as deductible, copayment and coinsurance. For the deductible and copayment, they have permanent amount. You don’t need to count or calculate to know how much you have to pay. With copayment 30% to fill the prescription cost then you will pay 30% as well, no matter how much the total amount of your prescription. Then the rest payment will be paid by the health insurance.
However, for the coinsurance, counting your health insurance payment is trickier. Because of coinsurance is in the form of percentage of the total amount of the care, you will owe different amount of coinsurance for the medical service you receive. If you get cheap medical treatment, then your coinsurance will not be much. However, if the health treatment you got was expensive then your coinsurance will be cost up to hundreds or perhaps thousands dollars. You should understand well on co insurance definition medical and how to calculate your coinsurance payment of health insurance. Then you will know how much you owe for coinsurance and you can plan the budget for it.
First, Find Your Coinsurance Rate
First thing first, you should find the coinsurance rate for the medical care types you are getting. Then you locate this in the Summary of Benefits and Coverage. You got them when first enroll your health plan. Sometimes, you can find the list of those items on your health insurance card. Make sure to be more careful, in some health plans, coinsurance can be the same number of percentage no matter the type of medical care you get. For instance, you can have 30% coinsurance for hospitalization and 30% coinsurance for drug prescription. On the other hands, for some other health plans, you may find low coinsurance for some services and higher percentage for other service. For example, you have 35% coinsurance for hospitalization but for surgery you only have 20%.
Next, Find the Cost of Your Care
Then, after you know your coinsurance percentage, you should determine the total amount of your medical care. If you use in network provider, your health plan has negotiated from the provider. Count your coinsurance payment depend on the discount rate not the standard one. Find the in network discount on your Explanation of Benefits.
Last, Calculate Your Coinsurance
To count the coinsurance you should pay, you will first convert the percentage into moving the decimal point. For example, your percentage is 15% so it becomes 0.15 and so on. Then, multiply the decimal figure with the total cost of your medical service care. To make it simply, it is coinsurance rate (in decimal) x total cost is the coinsurance you have to pay. That’s co insurance definition medical and how to calculate it.