Would Someone Please Explain Co-Insurance?

There aren’t too many people who really understand the concept of co-insurance.

This isn’t to say that some people “do” get the idea of what co-insurance really involves. There are, however, many more that get a nasty surprise when they leave a company for which they worked and had a group plan, a low deductible and a low doctor’s office visit co-pay. Co-insurance has actually been around for quite a long time; it’s just that managed care began to take over in the form of PPO and HMO plans.

In order to tackle the rising costs of health care, co-insurance came into being and varied by company and the plan they chose. It’s used to be the good old standby of 80% and 20% for the next $10,000. This isn’t to say that doesn’t still exist, but there are now newer options to cut Illinois health insurance premiums. The low-end co-insurance range is 50% / 50% to the upper end of 100% with the co-insurance coming in at zero dollars to $50,000.

Would you want a 50/50 split? That depends on how you feel about taking risks and also takes into consideration one’s budget and how healthy they happen to be. To be on the safe side, most savvy Illinois health insurance brokers will recommend the 80/20 or 60/40 percentages of the next $10,000 to $15,000.

So, to get to the meat of the matter, just what is co-insurance? Co-insurance is the amount of money you pay for medical services after you meet your deductible in a calendar year. A co-payment is a fixed dollar amount and co-insurance is a percentage. Let’s look at a quick example: there are quite a number of insurance plans with a 20% co-insurance of the next $10,000 “after” the deductible for hospital expenses, diagnostic tests, x-rays and lab work. This means “you” pay the 20%. Remember however, that the amount is capped per calendar year.

So let’s just use the example that you happen to have a $2,000 deductible in your calendar year with an 80% / 20% of the next $10,000. If you do the math, you will see that out-of-pocket expenses for that year would be $4,000 (for an individual) for covered services. Since a lot of this insurance lingo may be confusing, contact an Illinois health insurance expert to help you make some sense of co-insurance and what will work for you.

Randy Gillespie is with Illinois health insurance agency, Focus Insurance Group. To learn more about Illinois health insurance, Illinois health insurance quotes, Illinois group health insurance or to get an Illinois health insurance quotes, visit Focusinsgroup.com

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