Every health insurance policy consists of different parts. Each part provides a different form of coverage for you and your family. While there can be variations between policies, there is consistency due to the Affordability Care Act. This comes through metal levels: Bronze, Silver, and Gold. At each level, consumers pay a percentage of their medical costs, and the insurance company pays a tier portion, or what is known as coinsurance.
Before we begin, we would like to introduce you to how the parts of insurance play into how coinsurance works. Then we will explain what coinsurance means to you.
What are the Parts of Health Insurance in Texas?
Insurance plans have several pieces that work together to provide you with coverage. We would like to introduce you to a few of them.
Deductible – Deductibles are the amount you will pay out-of-pocket before your coinsurance begins to pay its portion. They are based on a calendar year and refresh each year. They are one of the factors that determine how much you will pay per month. Generally, the lower your deductible, the higher your premium. If you increase your deductible, you can see a lower premium.
Out-of-Pocket Max: Out-of-pocket max is the maximum amount you will pay out of your pocket per individual on your insurance policy. Once you meet your deductible, pay up to the amount stipulated on coinsurance, and reach your out-of-pocket maximum, your policy will pay 100 percent of medical expenses for that individual.
Primary Care Physician: Your Primary Care Physician (PCP) is the doctor you see for your general care. With some medical plans, you must see this doctor before seeking medical attention from a specialist or having other tests done. You may also need to remain within your network of physicians, or you may not have coverage.
Copay –Copays are fees that medical providers charge when you have an office visit. It is important to understand that this fee is for the visit alone, not the treatment you receive. It can be a flat dollar amount or a percentage and can vary by treatment, medical event, and plan. Some medical events, like a well check-up or other preventive services, can be included in your visit. See your medical plan for details.
Now let’s explain what your coinsurance is in relation to the above.
What is Coinsurance?
When you have an individual or family health insurance policy, you begin by paying your monthly premium. Then, you have your deductible, as we just learned a deductible is the amount you pay out of pocket. Once you meet this dollar amount, the cost-sharing portion of your insurance begins. This is known as your coinsurance. You will see it expressed as a percentage on your insurance Summary of Benefits. You pay a share of your medical costs, and your insurance company pays its portion.
What is coinsurance after the deductible?
Coinsurance can vary between insurance companies and even plans on how they cover each metal tier. Generally, with a Bronze metal plan, you will pay between 40 and 50 percent. With a Silver metal insurance policy, your portion will be between 30 and 40 percent. Gold metal plans have the best coverage; you will pay 20 to 30 percent of your medical expenses. Again, this will depend on the insurance company. For instance, Oscar Insurance has Silver plans at 30 percent, which is standard for the ACA. While Blue Cross Blue Shield of Texas has your portion for their Silver plans at 40 and 50 percent.
What is a 50 percent coinsurance medical plan?
These plans are becoming more common in the insurance industry. As the cost of insurance rises, and the mandates of the Affordability Care Act, insurance companies have built more plans to assist the consumer to meet both needs and mandates. While the mandate no longer exists, these affordable plans are becoming common. As we just learned about cost sharing, these plans split the cost of insurance fifty-fifty. Most insurance companies sell them, and they are available across both the Bronze and Silver tiers, especially with Blue Cross Blue Shield of Texas.
What is a 0 percent coinsurance medical plan?
Just as we talked about a fifty percent medical plan, there are zero percent medical plans. These plans mean that the insurance company pays 100 percent of expenses after the policy’s deductible is met. The benefits of these plans exist on several levels. Some have high deductibles and out-of-pocket expenses. Others have certain benefits.
- HDHP – High Deductible Health Plan – These plans have a high deductible and a low premium. Those who are healthy and do not have medical issues select these plans due to their affordability. All medical expenses are paid out-of-pocket by the insured until they reach the deductible. Then the insurance company pays 100% of medical costs stated in the policy for the remainder of the calendar year.
- Health Savings Accounts (HSAs) – Some HDHPs allow a savings portion to be attached to them. Policyholders can fund these accounts on a pre-tax basis when they use the funds for qualified medical expenses. For 2023, one can contribute $3850 for an individual and $7750 for a family. Oscar Insurance and United Healthcare Insurance both have HSA insurance plans.
Also, these plans do not have to be zero percent, just within the 2023 threshold of $1500 and $7500 out-of-pocket costs.
Cover Mile can help you find the policy that best suits your needs. You can contact your agents and we can find the insurance plan that provides you with the coinsurance that fits your current situation.
How Does Coinsurance Affect My Health Insurance?
Your health insurance company cannot charge you extra for providing an essential health benefit or modify your coinsurance to include these services. Since they are part of the Affordable Care Act, they are mandated to provide these 10 Essential Health benefits. They include:
• Outpatient healthcare
• Emergency services
• Pregnancy, maternity, and newborn care
• Mental health and substance abuse disorder services
• Prescription drugs
• Rehab and habilitative services
• Laboratory services
• Preventative and wellness services
• Pediatric, including oral and vision care
What is coinsurance in health insurance?
Coinsurance overall does not give you priority service for having a higher-rated plan with a lower coinsurance level. You will receive the same health care whatever type of coverage you have. Coinsurance simply divides expenses between the insurance company and the insured. This is determined first by the metal level you select, then by the plan you choose. The differences are:
- The cost-sharing between you and the insurance company – The higher the metal level, the more the insurance company pays for your medical expenses; they assume more of the risk.
- The premium you pay – The higher the metal level, the more costly your plan will become.
- Doctor/facility fees – The higher the metal level, the lower your copays and coinsurance become.
- Pharmacy benefits – Pharmacy benefits can also become more affordable on a higher-tiered plan.
Coinsurance can also differ depending on the type of plan network you have. HMOs tend to have lesser coverage; EPOs generally tend to have greater coverage. This can vary depending on the insurance company.
Coinsurance When You See the Doctor
We have explained what coinsurance means, but what about when you go to the office or need surgery? What do all these numbers mean in the real world?
What is coinsurance vs. copay?
When you read your Schedule of Benefits, you will either see a coinsurance percentage, or you will see copays. How they differ is, coinsurance is a percentage of the medical event while a copay is a flat fee. They are basically the same, just different methods of charging for services. In both situations, you will generally need to meet your deductible before the insurance company begins to pay. However, for most routine care, copays may be waived. This can include PCP doctor office visits or well-checkups.
Which medical facilities will charge me a copay?
For the most part, you will pay a copay when you visit a medical office or facility for treatment. Here are some common places where you will need to pay a copay:
- Doctor or Specialist office
- Emergency Room or Urgent Care
- Hospital or Outpatient Facility
Some insurance companies have a flat fee copay, while others require a percentage for services. Read your Summary of Benefits for more information. Cover Mile can also guide you through understanding how copays impact you and your family and which policy best suits your situation.
Whether it be your coinsurance or your premium, Cover Mile is available to assist you with understanding health insurance in Texas. We aim to guide you through the purchase process and how to choose the best policy for you and your family. Contact us today.