Choice Enrollment Blog
If you’re shopping for health insurance one factor that can play a large role in the price of your policy as well as the benefits you’ll receive are the copays, deductibles, and coinsurance. But what are they and how do they effect your overall medical expenses?
What are Copays?
Copays are the most well-known of these terms and most people are already familiar with how they generally work. A copay is the flat fee you pay towards medical services like prescriptions or visits to your physician. They are your per-instance out of pocket expense no matter what you’re seeing the doctor for.
Health insurance plans can have different copays for prescriptions, doctor visits, urgent care visits, and other various treatments and it’s important to understand the different situations that your different co-pays relate to.
Copays may also differ based on whether you visit a doctor or facility that is considered in-network or out-of-network.
With many of the health insurance plans we sell through different carriers, copays apply toward your annual deductible and coinsurance will go into effect for future visits and treatment.
What are Deductibles?
The deductible is the amount of your healthcare expenses that are not covered with copay and until you reach your deductible you are responsible for 100% of the costs. It’s a lot like collision or comprehensive car insurance, where you pay the first amount of money and the insurance only pays if the expenses that are in excess of that deductible amount.
The healthcare premiums you pay do not apply toward your deductible. There are often different deductible amounts for the individuals on your plan as well as the entire family. In most cases deductibles are reduced when you see in-network versus out-of-network medical providers; the out-of-network deductible is greater and separated from the deductible for in-network treatment you receive.
What is Coinsurance?
It’s easy to confuse copays and coinsurance because they sound similar, but they are certainly not the same thing.
After your expenses have surpassed your deductible, if your health insurance plan has a coinsurance percentage you’ll be responsible for paying that percentage of the remaining costs above and beyond the deductible.
For example, if your policy has 25% coinsurance the insurance carrier will pay 75% of the cost for services after your deductible has been met and you’ll be billed for the other 25%. Many of the plans we sell will include a maximum out-of-pocket amount, which means that 25% you’ll need to pay does have a cap as financial protection from very large medical bills.
The out-of-pocket maximum is an important safeguard we recommend to nearly every client. A major medical problem could happen to anyone at any time but it shouldn’t be a financial catastrophe that effects the rest of your life.
What’s the right Copay, Deductible, and Coinsurance for you?
It’s impossible to say because every individual has a different medical and financial situation and therefore has different needs for copays, deductibles, and coinsurance.
That’s why its important to work with a qualified health insurance agent licensed to sell insurance in the state you live in. If you live in Colorado where we’re licensed, we’ll make it easy for you. Just give us a call at (719) 481-1616 or request a health insurance quote straight from our website.