May 6, 2015
Understanding the basics of coinsurance can make the entire concept of health insurance a bit simpler. By discovering the facts about how coinsurance works and what it covers, you will come to a better understanding of general health insurance as a whole.
To fully understand the definition of coinsurance, it’s important to clarify two common words in insurance jargon terms:
1) Risks: in health insurance terms, a risk is the threat of damage, liability, loss, or any other negative occurrence caused by susceptibility to harm, that can be avoided through preemptive action.
2) Deductibles: before your health care services pay any money towards medicine, care, etc., you must pay a preset amount towards the cost. This preset amount is called a deductible.
Though this article explains coinsurance in health insurance terms, coinsurance is used in a variety of different insurance plans, but is largely utilized in health and property insurance. However, coinsurance works the same way regardless of the context.
Simply put, coinsurance is a percentage participation in which you and your company share the risks. Your percentage of the cost is typically determined by the amount the insurance company allows to be charged for services and can only be paid after you’ve reached your plan’s deductible.
Perhaps the easiest way to understand the concept of coinsurance is to explain it through a real-life scenario.
John has a $300 deductible that he’s already reached through prescription payments, doctor’s visits, etc. He hurt his foot while playing ultimate Frisbee and his primary care physician referred him to a podiatrist who can provide medical care for $500. John’s insurance plan will cover 80 percent of the total cost, leaving John’s coinsurance to cover the remaining 20 percent – or $100 of the service charges.
Again, your coinsurance can only be paid after the determined deductible is paid in full.
Determining which coinsurance health plan is best for you can be burdensome. Let Insurance Center Associates work with you today to find the plan that works ideally for your lifestyle. To learn more about coinsurance and to get your insurance plans underway, contact Insurance Center Associates, today.
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