Finally, an Article About Co-Insurance That You Can Understand!

What does co-insurance mean to you? Is it some foreign language you don't understand? Or maybe it's a black hole that just seems to suck up money.

Choosing a health insurance plan today can be very confusing, and co-insurance can be the most confusing part of that decision. So let's look at what co-insurance really means to you.

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A scenario for a 90/10 co-insurance plan

Finally, an Article About Co-Insurance That You Can Understand!

Let's say your plan has 90/10 co-insurance for certain covered medical services. That means that after you have met any deductible for those covered services, the insurance company pays 90% and you pay 10%.

Now let's say you had ,000 of medical services done. Here is the breakdown of the finances:

o Paying overage. The out-of-network provider charged 0 more than the reasonable and customary amount set by the insurance company. You will have to pay the provider that entire amount. The 90/10 co-insurance doesn't apply.

o Paying the deductible. After paying the overage, you still have to meet any deductible. Let's say it's 0. Your co-insurance doesn't apply to that either. It only kicks in after you've met your deductible for the year.

So let's review. By now, on a ,000 bill, you've paid 0. Now it's time for your co-insurance to kick in.

o You have paid 0 of your 00 medical bill. That leaves a bill of 0. Your insurance company will pay 90% of that, which is 0. You still have a 10% co-insurance which equals . Your total out-of-pocket for this bill, however, is 0. That's more than 10% of the total bill, you say? That's right. There is more to paying a medical bill than co-insurance.

Once you pay your co-insurance, your total out of pocket is 0.

Nothing says a medical insurance plan has to cover anywhere near 100% of medical bills. To save on premium, some plans have even lower co-insurance rates.

A plan with 80/20 coinsurance in the above situation would pay 0, and the patient would have to pay 0 out-of-pocket.

A plan with 60/40 co-insurance would only pay 0, and the patient would pay 0.

Hopefully, the patient has that amount in an emergency savings account, or he'll have a debt problem to solve.

When it comes to medical bills, ,000 isn't much money. Out-of-pocket costs can escalate fast with low co-insurance plans like the 60/40 plan above. When picking plans, you will have to carefully weigh the benefits of lower premium against the risk of huge bills. Even if you're healthy, there is no way to tell when a serious accident might change everything.

So stay safe and healthy, and consider your finances an integral part of your health.

Finally, an Article About Co-Insurance That You Can Understand!

Check out Good Neighbor Insurance Resource Library for other helpful, short and easy to read articles on domestic insurance and international insurance.

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