There are only a few people who purchase individual health insurance plans for themselves or their families that really understand the concept of coinsurance. The idea of coinsurance is even more mind boggling to individuals and families that are leaving a company sponsored group plan where they just had to pay a low annual deductible and a $10.00 or $20.00 office visit co-pay. The concept of coinsurance has been around for a long time, but has been used less in past years as managed care started to take root in the United Sates with HMO and PPO plan.
Coinsurance has made a come back in recent years to help combat the raising cost of health insurance. Coinsurance levels differ by company and plan. The old standard of 80% / 20% of the next $10,00 of the past are still available, but new options to help reduce monthly health insurance premium have been introduced. The new level of coinsurance range on the low end to a 50% / 50% to on the high end 100% with coinsurance on the low end of $0.00 to a high end of $50,000. Depending on your risk tolerance a 50% / 50% of the next $50,000 might be the right plan depending on your health status and budget. Personally, I never recommend this type of plan, as the risk in my mind is too great. My recommendation is to go with an 80% / 20% or 60% / 40% of the next $10,000 or $15,000.
So now you have reached your calendar year deductible and your insurance is still not paying 100% for your covered service. You get the explanation of benefits from the insurance company showing what you must pay. You think to yourself that the insurance company is really sticking it to you and why should I have insurance at all. You call your agent who sold you the plan on price alone, but they never return your call. This is a common problem with coinsurance as I get many calls and visits to my website each week from frustrated people looking for a new health insurance plans with a lower coinsurance and a low monthly premium. When we get an inquirer of this nature, we take the time to educate the health insurance consumer as to how coinsurance works. We start off by giving them the example below and expand on the concept as they ask questions Coinsurance is the amount you are responsible for paying for medical services after you meet your deductible in a calendar year. Unlike a co-payment, which is a fixed-dollar amount, coinsurance is expressed as a percentage. For example, many insurance plans have 20% coinsurance of the next 10,000 after deductible for hospital costs; labs and x-rays and diagnostic testing meaning you pay 20%. This amount is capped per calendar year. For example you have a $1,000 calendar year deductible and a 80% / 20% of the next $10,000, your total out of pocket in a calendar would be $3,000 for covered service for an individual and a family plan would be $6,000.