Co insurance

There are a lot of places where we direct our cash to and at times we expect to share the cost of these expenses with someone. In health care, there is a cost-sharing platform that exists through which patients together with their health insurance provider pay part of the medical expenses. Co insurance is an example of cost sharing. If you are looking for the best health insurance plan for your family, it is important to know what co insurance is and understand how it works.

Co insurance a cost sharing agreement between the insured and the insurance provider found in a health insurance policy. Typically, it is calculated as a percentage of the total charges levied against you for services given. The percentages are usually expressed in pairs e.g. 80/20 where the 80 represents the insurer’s portion and 20 is your share of the cost. This plan is favors the policyholder in that he or she will be responsible for a percentage that won’t exceed 50%.

For example, let’s say your health insurance plan has a deductible of $1000 and an 80/20 co insurance rate. When you visit a doctor for treatment at a cost of $200, the health plan would pay $160 after the deductible has been paid and you would pay $40.

The insurer can only pay for his share of the total insured cost once you have paid your deductible for that year. A deductible is the amount you must pay before the insurance company steps in. This amount must first be met before the co insurance kicks in.

Cost-sharing often stops when the medical expenses equal your out-of-pocket maximum or limit, which does not exceed $6600 for one person and $13200 for a household. When your medical expenses exceed this limit, then your insurance company pays for any additional costs you may incur.

Out-of-pocket maximum is the maximum amount of money that you pay from your own pocket for health services in a policy period, normally one year. Usually, the deductible contributes to this limit but you may need to consult your insurance provider for more information.

Health insurance plans are always cheaper when you pay money more from your pocket. Higher deductibles, co insurance rate and out-of-pocket maximum reduce the cost of monthly premiums thus making health insurance more affordable.

Some health insurance plans provide a co insurance rate of 100%. This means that the insurer will cover all medical expenses after you meet your deductible. The co insurance works best with low deductible plans and it is suitable for young and healthy people. You should agree to an affordable co insurance rate.

The percentage of co insurance may change according to the insurance provider’s networks. With an in-network health plan, if a patient incurs more costs that are not covered in the plan, he will have to pay the extra cost. For out-of-network health insurance plan, the insurer will cover all the costs but the co insurance rate will be higher.