Understanding California Health Plan Co-Insurance
First,
what is
the
official
definition
of
co-insurance?
Coinsurance
Once you
have met
your
deductible,
you pay
coinsurance
for
additional
medical
care. It is
a percentage
of the
billed
charge. For
example,
your
insurance
company
might pay
80%, and
then you
would pay
20%. It is
similar to a
co-pay, but
is a
percentage
instead of a
dollar
amount.
Now,
let's
dig a
little
deeper.
With
California health
insurance,
it is
common
to speak
of their
plan as
an 80/20
plan or
a 70/30
plan.
They are
essentially
referring
to the
co-insurance
part of
it.
With the
80/20
example,
the
health
carrier
is
picking
up 80%
of the
charges
and you
are
picking
up the
remaining
20%.
If there
is any
kind of
deductible,
you must
pay that
first at
100%
until
met.
Let's
take an
example
and see
how
California
health
insurance
plans
essentially
break
down
into
three
main
stages.
Stage
1 - The
deductible
YOU PAY
100%
Let's
say you
have a
$500
deductible.
Except
for
services
that
are
separate
from the
deductible
(usually
office
visits
and
prescriptions...see
COPAYS),
you will
pay the
discounted
charges
at 100%
until
you meet
your
deductible.
You can
find
more
information
on
deductibles.
Stage
2 - The
co-insurance
YOU
SHARE A
PERCENTAGE
Once the
deductible
is met,
you then
start
sharing
the cost
with the
carrier.
Let's
say our
plan is
70/30
and the
charge
is
$1000.
You pay
the
first
$500
(deductible)
and then
you pay
30% of
the
remaining
$500...or
$150.
Of the
first
$1000
charge,
you
would
pay $650
out of
it.
If you
have
another
$1000
charge
in that
same
calendar
year,
you
would
pay 30%
of the
1000 (or
$300)
since
your
deductible
was
already
met.
When do
you stop
paying
the
30%??
Stage
3 - The
Max Out
of
Pocket
THE
CARRIER
PAYS
100%
Once you
have met
your
Max
out of
Pocket
(sometimes
called
the Copay
Maximum),
the
carrier
will
then pay
100% of
covered
benefits,
in-network.
For our
plan
example,
let's
say we
have a
$500
deductible,
70/30
co-insurance,
and
$5000
max out
of
pocket.
If we
get a
$50,000
bill in
a
calendar
year,
you pay
the
first
$500,
then 30%
until
you
reached
another
$5000
out of
pocket.
For that
$50K,
you
would
pay
$5500
and the
carrier
would
pay
$45,500.
Co-insurance
is nice
but the
real
reason
to have
health
insurance
is the
max out
of
pocket.
Co-insurance
usually
applies
to
services
outside
of the
office
visit
and
prescriptions.
You will
typically
see the
same
co-insurance
percentage
for
hospital,
lab,
surgery,
emergency
(sometimes
has
separate
additional
copay)
and
physician
services.
It's
important
to stay
in
network
for PPO
plans.
Let's
say you
have
70/30
plan and
you see
a doctor
out of
the
PPO
network
on a
non-emergency
basis
for
$1000 of
services
and your
deductible
is
already
met
(you're
in Stage
2).
Two
things
will
probably
happen.
The
health
insurance
plan
will
probably
have a
separate
percentage
for out
of
network...let's
say
50/50
instead
of
70/30.
Also,
the
carrier
will
apply
this
lesser
percentage
to what
they
would
pay an
in-network
provider.
For
example
with the
$1000
charge,
perhaps
the
contracted PPO rate
is $600
(discount
is
usually
30-60%).
The
carrier
would
then pay
50% of
the $600
or $300
of the
total
$1000.
You pay
$700.
Compare
this
with the
30% of
600 you
would
pay for
an
in-network
provider.
$700
versus
$180 out
of your
pocket.
Use
in-network
providers!
Other important concepts to help you understand your California health insurance quote are:
Co-pay
Deductible
max out
of
pocket
To
run your
instant
health
insurance:
California
Individual
Family
health
insurance
quote
California
Small
Group
health
insurance
quote
