Insurance Basics: Deductible & Coinsurance

Submitted by renditioner on Wed, 08/27/2008 - 09:12
A lot of you may be confused with what is coinsurance after deductibles. It is true that many individuals purchase health insurance without knowing that co-payment and deductibles are two different things. If you are purchasing health insurance you must be aware of what the policy holds for you and clearly you must be aware of the different terms used and what they mean.

What is a deductible and co-insurance?

Deductible: This is the amount that you are responsible to pay before your insurance company starts paying when a claim is made. Your premium value is also determined by the deductible that you choose. The higher the deductible, the lower will be your premium.

Co-insurance: Say you have a deductible of 2000 and the hospital bill comes around at 20, 000. As a rule you have to pay off the deductible, i.e. 2000 out-of-pocket before the health insurance company begins to pay. So you still need 18000 to pay off the rest of the bill. If you have a 80/20 co insurance and the insurance company pays 80%, you need to make 20% of the remaining 18, 000. This means that your out-of-pocket costs would be deductible + the percentage of co-insurance you have agreed upon.

Co-insurance also has a stop loss clause that lets you pay your share of the co-insurance up to a certain limit for that year after which the insurance company bears 100% of the claim amount.

The difference between coinsurance and deductible is not clear to a lot of individuals. This may create a lot of confusion when you make a claim. But if your policy has this clause you must clearly understand what will be your contribution after a claim is made. Ask your agent to explain what portion you will have to pay and what portion your insurer would pay and how both co insurance and deductible would come into play.

What does coinsurance after deductible mean?

Coinsurance after deductible means that under a health insurance policy the insured will cover a fixed percentage of the covered expenditures after the deductible has been paid. This is almost similar to co-pay except that in co-pay the insured is supposed to pay a fixed dollar amount instead of a percentage when the medical service is delivered.

Related Readings:

I was wondering whether its coinsurance after deductible or is it the whole insurance claim..Say I have a deductible of 500$ and a 70/30 coinsurance policy .When does the coinsurance come into play?After I pay the 500$ deductible or for the whole sum of the insurance claim?

Posted: 27 Aug 2008 09:40 Post Subject:

The deductible and coinsurance in a policy can be confused by many. However, the deductible comes off of your part if it's 70% then the deductible comes off that...(on all co-insurance claims I've worked anyway).

Posted: 27 Aug 2008 02:11 Post Subject: deductible and coinsurance

Hi dear..when you have a policy with deductible and coinsurance it works this way: suppose you have a claim amount worth $ X with a deductible worth $500 & a Co-insurance of 70/30, over here you're all set to pay {(500 + 30% of (X-500)}.
I say this because co-insurance is calculated as the % of allowed expenses once the deductible is paid up. That's why I say you avail coinsurance after deductible is paid. Fatman

Posted: 28 Aug 2008 04:59 Post Subject: coinsurance deductible

I agree with what Fatman has said. In a policy that has deductible and coinsurance, deductible needs to be paid before the insurance benefits kick in and it is natural to have coinsurance after deductible. Its your must pay 'out-of-pocket' share and is determined in dollar terms.

Suppose, your insurer has promised to cover 80% of the medical expenses after you pay the deductibles. Hence, you should pay the deductible amount along with the remaining 20% of the costs.

Normally, the co-insurance is expressed as a percentage of the covered expenses.

Hope it clarifies :D

~Jeremy

Posted: 28 Aug 2008 07:06 Post Subject:

So what is the use of deductible then ?If there is an agreement of sharing in co-insurance is it really necessary to have deductibles also in your policy? Is it wise to get a policy with deductible and coinsurance both?

Posted: 29 Aug 2008 08:38 Post Subject: coinsurance and deductible

In a policy with deductible and coinsurance the deductible must be met before the insurer will pay anything. It's normal to have coinsurance after deductible. Covered expenses in excess of the deductible, in your case, will be paid @ the 70/30 co-insurance rate, up to any "stop-loss" limit that may apply in your policy.

To answer this question:

So what is the use of deductible then ?If there is an agreement of sharing in co-insurance is it really necessary to have deductibles also in your policy? Is it wise to get a policy with deductible and coinsurance both?



It's impossible to find a major-medical insurance plan that does not contain a deductible, and has been so for decades. HMOs generally have no deductible, they have "co-pays." PPO plans will commonly have deductibles which will vary with the plan. The purpose of a deductible in medical expense coverage is no different than those found in car insurance. They are primarily intended to eliminate small claims, and force the insured to retain part of the cost of the loss. You may be able to change the amount of the deductible, depending on whether it's a group or inidvidual plan. Just remember, the lower the deductible, the higher the premium costs will be.

With many plans, the deductible is waived for certain services, but applied to others. Hope this helps to understand the importance of coinsurance and deductible in some way...

InsTeacher 8)

Posted: 01 Sep 2008 12:55 Post Subject:

Some HSAs have no coinsurance after deductible has been met.

Posted: 02 Sep 2008 03:48 Post Subject:

The purpose of the deductible is to reduce the costs the insurer has to pay.

It keeps people from over using their policies. It also shifts the smaller expenses to the insured and this means that the insurance company doesn't have to pay administrative people to handle the claims for the small stuff.

A zero deductible policy with no coinsurance would not be cost effective. It is more efficient to have the insured pay for the smaller stuff. There's nothing wrong with getting your coinsurance after deductible is met.

Posted: 27 Apr 2010 08:52 Post Subject: Bill ?

Help QUESTION I called the hospital to see what was the remaining balance they said zero they even sent me a zero balance and showing what the insurance paid and what credit they gave and at the balance it said -20.32.now I recieve a bill 7 months later saying I owe them $481.60 claiming that i owe co insurance and deductible is that possible after they sent me a receipt showing-20.32?should I pay?????

Posted: 30 Apr 2010 03:32 Post Subject:

You could owe money now if the hospital had not included all of the services in the last bill you had seen with the credit balance. Chances are that they failed to bill the insurance company for something, or the insurance company inadvertently failed to make a payment. Or . . . you actually owe some money to the hospital -- it wouldn't be a first, since most health insurance does not cover "everything" you may be billed for.

But before you fly off the handle and get mad at everyone, take it one step at a time. Contact the hospital billing department and your insurance company's claims department and ask each for an accounting of the hospital/doctor charges and claims payments. If those two documents do not match, then something is wrong beyond your control. It will become evident that something was not billed or not paid. When you identify that, and bring it to the attention of the proper party, then the matter may take care of itself.

If everything billed has been paid, and there is a balance due, you may need to discuss the claim with the insurance company to make sure they paid everything they are liable to pay. Claims departments are staffed by human beings, and they sometimes make legitimate mistakes. And, yes, occasionally they deliberately don't pay for things they are supposed to pay for. But if the insurance company has paid all that your contract obligates them to pay, then you owe the difference to the hospital.

The good news is that the hospital will probably agree to negotiate a payment in full that is less than the few hundred dollars you may owe. At the very least, they'll agree to a payment schedule, even if you can only afford $50 per month. They would much rather collect anything than collect nothing.

So talk to people calmly and with respect, and you should get answers you can understand. If not, come back here for more advice.

Posted: 30 Apr 2010 03:41 Post Subject:

Some HSAs have no coinsurance after deductible has been met.



It's not the HSA that has no coinsurance or deductible, it's the "High Deductible Health Plan" (HDHP) that is required in order to have the HSA that has the deductible and coinsurance.

And yes, many HDHPs offer 100% coverage after the deductible has been met. But expect the deductible to be the maximum allowable by law. In exchange for a lower deductible, expect to pay up to 30% of the covered charges. There will be other limiting language in the policy to end your out-of-pocket & coinsurance expenses at a relatively low level beyond the deductible. Raising the out-of-pocket limit, like raising the deductible, will lower the cost of the insurance.[/quote]

Posted: 08 Jun 2010 09:22 Post Subject: scripts

what does it mean on prescriptions when it says your cost is the greater of $15 or 40% of coinsurance?

Posted: 08 Jun 2010 10:49 Post Subject:

what does it mean on prescriptions when it says your cost is the greater of $15 or 40% of coinsurance?



I think you are mistaken in your question. You may be confusing COPAY and COINSURANCE. Copays are normally expressed as $$ amounts ($15 or 40% of $?? is actually a dollar amount, not a percentage). Coinsurance is normally expressed as a percentage sharing arrangement -- as in 80/20 (80% insurer / 20% insured). Therefore, it makes no sense to say "40% of x%".

You prescription plan probably says "Your prescription copay is the greater of $15 or 40% of the actual cost". If that's true, any prescription valued at $37.51 or more will cost you 40% of the actual charge, which will be more than $15.00 ($15 = .40 * $37.50).

Posted: 22 Jun 2010 02:59 Post Subject: Secondary Billing/Colledtions

When processing 2nd claims and there is a deductible and coinsurance on both primary and secondary does insured have to meet both deductibles and both coinsurances in order to have the 2nd claim paid? And if there is a balance left after the secondary has paid is that supposed to be the insured's responsibilty?

Posted: 22 Jun 2010 07:49 Post Subject:

If there is primary coverage and secondary coverage, each of which has a deductible, then, yes, the deductible normally must be satisfied in each policy before coinsurance would apply. There can be language in a policy that waives the deductible under certain circumstances, so regardless of what's said here, one has to follow the contract language, and the claim must first be presented to the primary insurer.

Whenever there's a doubt as to what is or is not covered, or how the payment and coordination of benefits clauses work together, the safest bet is to contact the agent or insurer for clarification.

Posted: 24 Jun 2010 12:09 Post Subject:

I liked Carmel's question because this has been driving me insane for the first few weeks of my new job. Carmel asked "When processing 2nd claims and there is a deductible and coinsurance on both primary and secondary does insured have to meet both deductibles and both coinsurances in order to have the 2nd claim paid? And if there is a balance left after the secondary has paid is that supposed to be the insured's responsibilty?" I WILL JUST BE REFERRING TO CLAIMS (NOT SECOND CLAIMS OR WHATEVER SHE MEANT THERE).

So what I get from this is that the patient will have to owe both deductibles let's say for example the patient owed Medicare's $155.00 deductible and GHI's for example ($300.00 deductible)) before the insurance companies will split the coinsurance as 80%/20% (for example) where Medicare pays 80% of coinsurance and GHI pays 20% of coinsurance right?

Also, my other question is, if let's say Company X is a provider and Company X sends claims for dos 4/15/2010 and the patient saw Company X Provider on 4/18/2010, 4/19/2010, 4/31/2010, 5/01/2010, 05/02/2010, 05/03/2010, 05/04/2010, 05/06/2010, 05/08/2010, 05/07/2010, 05/10/2010, 05/11/2010, 05/12/2010, 05/13/2010, 05/24/2010 05/25/2010, 05/26/2010, 05/27/2010, 05/28/2010, 05/29/2010, the rest of May and up to June 6/24/2010 dos, and not all of the DEDUCTIBLE has been fully "met" (insurance terminology for applying claims to deductible) by June 24, (AND ALSO "MET" IS NOT REFERRING TO THE PATIENT PAYING IT YET), and none of the dos from 4/18/2010, 04/19/2010 and on have been sent to the insurance company yet, and then on 06/26/2010 COMPANY X PROVIDER sends the insurance company the claims, the insurance company will apply all those dos to the deductible and add up all those dos to its $155.00 Medicare deductible and try to get the deductible "met" (insurance terminology even if the patient did not PAY it yet), and then the patient will be billed the separate amounts for each dos, or will the patient be billed the full deductible amount once it has been "reached" (when claims fully "met" (as above) the deductible? **Also the secondary insurance GHI deductible would need to "met" by sending the claims to the GHI insurance so GHI can apply those claims to the deductible before there is an 80/20 split of coinsurance between Medicare and GHI on any claims submitted after the deductibles have been met? **Also, what happens to Medicare paying claims if it's deductible was "met", but GHI's deductible was not "met" yet? Also, what would the patient be responsible for in the circumstance in that question?

Finally, let's say the deductible was not PAID by the patient yet, the insurance company will not pay anything at all or do anything with a claim except bill a patient from the deductible amount that they can get from the claim right and only expect the patient to pay ONLY the deductible and insurance will cover 80/20 of all rest of bill or bills? What is an insurance company doing to a claim even if the patient has still to meet the deductible? Are they going to pay the part of the bill (if there is a coinsurance) on that claim and other ones once the patient pays his deductible fully? Will they pay their portion of the bill even if the patient takes a long time let's say, by the end of the year and finally "met" the deductible? Will they pay their portion of the bill even if the patient met his deductible for 2010 on let's say Jan 3, 2011 or will something else happen?


Thank you for any help!

Posted: 24 Jun 2010 04:54 Post Subject:

What is your "new job" and why hasn't your employer trained you?

So what I get from this is that the patient will have to owe both deductibles let's say for example the patient owed Medicare's $155.00 deductible and GHI's for example ($300.00 deductible)) before the insurance companies will split the coinsurance as 80%/20% (for example) where Medicare pays 80% of coinsurance and GHI pays 20% of coinsurance right?



Are you asking about a GHI Medicare Advantage (HMO or PPO) plan, or are you talking about some other insurance from GHI?

If you're asking about one of GHI's Medicare Advantage plans, then your whole discussion of deductibles is way off track.

When a person enrolls in a Medicare Advantage plan, they are substituting an HMO or PPO for Original Medicare Parts A & B. The Medicare beneficiary still pays their Medicare Part B premium each month, but they are no longer covered by or subject to the Part A or Part B programs. Their benefits are entirely provided by the Medicare Advantage plan instead.

There is usually no general discussion of 80/20 coinsurance for in-network care under a Medicare Advantage HMO or PPO. The GHI Medicare Choice PPOs have out-of-network copays that are higher than in-network copays, and appear to have out-of-network coinsurance of 20% or 25% depending on the service/treatment.

As far as I can tell, GHI's Medicare Choice PPO plans in New York have no deductible. Depending on the plan chosen, there is an out-of-network Out of Pocket maximum ranging from $1500 to $7500. The whole discussion of deductibles normally evaporates when discussing an HMO, Medicare or otherwise.

Also, my other question is, if let's say Company X is a provider and Company X sends claims . . .



Well, your whole scenario that follows this opening statement is not plausible. Assuming for a moment that a person was subject to Medicare Part B's $155 deductible, how could the series of 20-30 or more "dos" (whatever "dos" is referring to) not total at least $155 in 2010?

Finally, let's say the deductible was not PAID by the patient yet, the insurance company will not pay anything at all or do anything with a claim



Theoretically, that would be the case. But the whole system of Medicare billing under Part A and Part B is very different. Service providers (hospitals, physicians, others) submit Medicare claims directly to the regional Center for Medicare & Medicaid Services ("CMS"). CMS determines the medical necessity of the service, determines the allowable charge, deducts any unpaid portion of the $155 annual deductible applicable to the claim, and sends the provider payment for 80% of the balance. Any unpaid amount the patient is responsible for is billed to the patient by the service provider.

Typically, the cost of a patient's first one or two office visits in a year is sufficient to overcome the annual deductible.

insurance will cover 80/20 of all rest of bill or bills? What is an insurance company doing to a claim even if the patient has still to meet the deductible?



and

Will they pay their portion of the bill even if the patient takes a long time let's say, by the end of the year



Not entirely sure you understand the whole concept of coinsurance. The company does not pay "80/20". Coinsurance is the percentage of sharing between insurer and insured AFTER the deductible is satisfied. "80/20" means that once the deductible has been fully met, the insurance company pays 80% of the allowable charge, the patient pays the remaining 20%.

Satisfying the deductible is not "discretionary" -- the patient cannot take all year to pay the deductible (unless he has not had much in the way of medical expenses all year). When a medical insurance plan has a deductible, no claims are paid by the insurance before the deductible is satisfied (unless certain expenses are not subject to the deductible).

Will they pay their portion of the bill even if the patient met his deductible for 2010 on let's say Jan 3, 2011



This makes no sense at all. Again, the insurance company does not pay claims before the deductible is satisfied.

Digest this and see if you can post your scenarios again with better understanding.

Posted: 28 Jul 2010 02:11 Post Subject: Help

what does it mean when the insurance company states your coinsurance is subject to your deductible and copay?

Posted: 28 Jul 2010 09:57 Post Subject:

your coinsurance is subject to your deductible and copay



This is a lawyerly way to say, "Before we pay a portion of your covered expenses, you must first satisfy your deductible and any required copay amount."

Coinsurance in health insurance is the %% of sharing between the insurance company and the insured. What was once common, 80/20, is now more often 70/30, as a way to reduce premiums. But it means more out of pocket expense for insureds.

Copays are the $$ an insured pays to a service provider (doctor, hospital, lab, therapist, etc) each time a covered service is performed. Common copays are $10 to $30 for a physician visit and $50 to $100 for a trip to the Emergency Room (using an "urgent care center" instead of the ER usually means a smaller copay). Copays are separate expenses from the deductible, if any, and do not normally count toward satisfying one's deductible. Many HMOs and PPOs do not have a limit on the amount of copays that can be paid in a year. Others include them in the "stop loss".

Deductible is the $$ the insured must pay over and above any copays before the insurer will begin to apply the coinsurance formula. Each insured must satisfy their own deductible, but in a family policy, the total deductible is usually 2x or 3x the individual deductible.

The one other term I mentioned, "stop loss" (or "out-of-pocket limit") is the total expense an insured will have in one year beyond their premium payments. Some contracts include copays and deductibles in the "stop loss", some do not. An insured must read their contract (or outline of coverage) to know how the stop loss is determined. It is an insured's responsibility to keep track of expenses to make sure the insurer invokes the stop loss as required. Once the stop loss has been reached, the insurer normally pays all covered expenses for the rest of the year 100%. If the contract covers more than one person, the stop loss usually includes the expenses of all insureds, rather than a per person stop loss.

Posted: 18 Aug 2010 06:51 Post Subject:

why ur so sweet

Posted: 06 Sep 2010 10:22 Post Subject:

is is true that in an 80/20 co-insurance, the patient pays 80% and the insurer pays 20% of the allowed charges?

Posted: 07 Sep 2010 05:40 Post Subject:

No, it's the other way around. The bigger number is the insurance company's responsibility. The worst you might obtain, when it comes to coinsurance is 50/50. To go the other way doesn't make much sense, especially when you see what doctors and hospitals are actually being paid by HMOs, PPOs, and Medicare/Medicaid.

Most policies with coinsurance provisions are 70/30 or 75/25. There are a few with 60/40. Some out-of-network claims in some PPO policies might drop to the 50/50 level.

Posted: 10 Sep 2010 12:47 Post Subject: Help Please

I really need help. I have no health insurance and I'm a insulin dependent diabetic. I also have a husband and under 1 year old daughter who have no coverage. My daughter lost Medicaid when we moved states. I've been trying to get my insurance agent (state farm) to get us insurance through them. They use Assurant Health. I've heard bad things about them. Can you put me at ease. It seems to be the most affordable, for that matter, the only insurance I can get. Also, I don't understand, are the deductibles and coinsurance per person on the policy. I'm looking at a $5000 deductible 50/50 coinsurance. Does this mean it's going to cost me $15000 before any of us can use our insurance and then still, on top of $400+ per month, going to cost another 50% of a hospital stay? What about going to just the doctor? Do you have to meet deductible and coinsurance for that? If so, I may as well keep self paying and save the insurance premium. Please help, someone.

Posted: 13 Sep 2010 02:19 Post Subject:

Also, I don't understand, are the deductibles and coinsurance per person on the policy. I'm looking at a $5000 deductible 50/50 coinsurance. Does this mean it's going to cost me $15000 before any of us can use our insurance and then still, on top of $400+ per month, going to cost another 50% of a hospital stay?



It could mean exactly that.

Most policies with deductibles have an "individual" deductible and a "family" deductible. Some policies describe a family deductible as two or three times the deductible for one individual. So it could mean $10,000 or $15,000 in your case -- or the $5000 deductible could be the "family" deductible -- why hasn't your agent made this clear to you?

The saving grace, so to speak, will be found in the "STOP LOSS" limit in the contract. This is the most amount of out-of-pocket expense you will endure in one year, beyond premiums.

What about going to just the doctor? Do you have to meet deductible and coinsurance for that? If so, I may as well keep self paying and save the insurance premium.



Depending on the contract, physician visits may or may not be subject to the deductible or coinsurance. If they are subject to the deductible, then, yes, you will have to first satisfy the deductible before the insurance will cover some or all of the cost. So your "economic" decision/question is a legitimate concern.

It fails mostly on the possibility of a catastrophic hospitalization or illness. You could pay one monthly premium and suffer a hugely expensive medical event covered by the insurance, or you could put one month's premium in a savings account and still suffer the catastrophic event. Which will be more "profitable" (or "less costly")?

Your alternative is to find an HMO for your healthcare. If accepted, you would pay your monthly premiums, copays only when you visit network providers, and limited or no out-of-pocket expense if hospitalized. Most HMOs do not have deductibles to be concerned about. But many, if not most, HMOs may currently decline to cover you as an insulin-dependent diabetic.

Your State Farm agent may not represent any HMOs, and so has not offered that option to you. Look for another "independent" agent or make an application with an HMO directly.

Posted: 20 Sep 2010 06:27 Post Subject: health insurance

I've never been to a Dr. for this condition, but research has shown me that I have a serious bunion and I need surgery. I've only had my insurance for 3 months now and didnt have insurance prior to that. Will they consider this to be a pre-existing condition since I now need surgery?, and my deductable is $1000. will I have to pay that before surgery can be performed? Help...

Posted: 21 Sep 2010 05:44 Post Subject:

Will they consider this to be a pre-existing condition since I now need surgery?, and my deductable is $1000. will I have to pay that before surgery can be performed?



They won't consider your bunion a preexsiting condition because you need surgery, it is a preexisting condition because you've had the condition for what, maybe 10 or more years, only now it's going to be expensive to correct it. If your surgery is not excluded as a preexisting condition, then, yes, you have to satisfy the deductible in most cases before the insurance will begin paying for covered services and procedures.

Posted: 10 Oct 2010 04:42 Post Subject:

Was reading this article and it says you pay your portion of the deductible and coinsurance to "your insurer"? Don't you pay it to the one who provided the service (i.e. hospital, lab, or doctor) once the claim has been processed?

Posted: 11 Oct 2010 01:11 Post Subject:

it says you pay your portion of the deductible and coinsurance to "your insurer"? Don't you pay it to the one who provided the service (i.e. hospital, lab, or doctor) once the claim has been processed?



Deductibles are the portion of "first dollar" expenses paid by an insured before the insurance company begins to pay any portion of a claim.

Coinsurance is the "percentage" of a claim shared between the insurer and the insured (such as "80/20" or "70/30"). When a claim is submitted, the insurer pays its contractual percentage to the provider (or as reimbursement to the insured). The insured is responsible to pay the provider the balance of the unpaid portion of the bill.

You are correct, any reference to paying deductibles and coinsurance to the insurance company is inadvertently wrong.

Posted: 12 Nov 2010 06:48 Post Subject: coinsurance

say i have a 70/30 coinsurance. is the dr suppossed to collect what is billed or the allowed amount

Posted: 12 Nov 2010 11:02 Post Subject:

The physician bills for his services. If you have 70/30 coinsurance, there is probably additional language in your contract that states the insurer will cover claims on the basis of "usual, customary, or reasonable". They will determine the UCR value of the physician's services and pay 70% of that (assuming you have met your deductible for the year). If your physician's charges exceed UCR, you will pay the difference between what was billed and what was paid, which will be more than 30%.

If you have a PPO with coinsurance, and your physician is in the network, then the scenario is slightly different. The physician has contracted to receive a specific amount of money for his services. If your coinsurance is 70/30, then you will pay 30% of the prenegotiated rate for "covered" services.

Posted: 13 Nov 2010 05:56 Post Subject:

If you have a PPO with coinsurance, and your physician is in the network, then the scenario is slightly different. The physician has contracted to receive a specific amount of money for his services. If your coinsurance is 70/30, then you will pay 30% of the prenegotiated rate for "covered" services.

I think I got it...So the provider has to be within the insurance company's ppo network in order to be reimbursed at 70/30 for services they provide right?

Posted: 13 Nov 2010 05:57 Post Subject:

Insurance companies have to have their own network of providers under the policies the insurance companies have right?

Posted: 14 Nov 2010 03:26 Post Subject:

Not sure exactly what question you are asking Nicholas. But in HMO and PPO plans, each insurance company creates its own network of providers (it is not uncommon for physicians to be members of four or five different HMO/PPO networks).

The HMO/PPO then publishes its list of providers for the subscribers -- used to be mini-telephone book documents, but now it's all posted online. If in an HMO, one must voluntarily select a PRIMARY CARE PROVIDER (MD, DO, RNP, PA) as described by the plan. The PCP may be changed as often as once per month (effective the first of the following month in most cases). If not voluuntarily selected, the HMO will assign the subscriber to one close to the person's residence address. That PCP must provide most patient services or obtain referrals to network specialists for the subscriber. HMO primary care providers agree to accept the HMO's "negotiated" rates (kind of like having a gun held to your head and being told what you will accept) plus the subscriber's copay at the time of service. The additional "carrot" for the HMO PCP is something called "capitation" -- a regular monthly payment for each subscriber enrolled in their practice (in SoCal in 2010, typical capitation rates for an MD are: Male adult, $20-$22, Adult female $23-$27, child under age 13, $20-$25, child age 13 - 18, $22-$27) and they get the money whether they ever see the patient or not. Pays for rent, utilities, an office secretary or other staff person, but is not expected to be the PCP's own compensation. Service billings for patient visits and copayments take care of that.

In a PPO, the subscriber is not limited to a PCP (although they are encouraged to establish a similar relationship), and they are not limited to the network of physicians. They may choose to go outside the network -- such as when the doctor they've been seeing for years is not a member of the network -- but doing so always costs more money out of pocket, because in the network, the providers have agreed to a contracted rate of payment from the PPO plus a copayment from the subscriber at the time of service. There is NO CAPITATION in a PPO, but physicians receive a higher level of compensation on a FEE-FOR-SERVICE basis. They are allowed to bill for more services than an HMO physician. But not much more. And they don't get paid a lot more either.

Honestly, when I see the pitiful amount of money an HMO or PPO physician or surgeon (or hospital or clinic/laboratory) gets from the HMO/PPO compared to the premiums people are paying, I wonder why any young person in America would want to become a doctor. Leave medical school $300,000+ in debt and have to work for at least 20+ years as an HMO/PPO physician to pay it off. Not appealing to me in the least.

Posted: 18 Nov 2010 01:23 Post Subject: 80% coinsurance after deductible

I would like to know 80% coinsurance after deductible means

Posted: 20 Nov 2010 01:27 Post Subject:

If we're talking about health insurance, then "80% coinsurance after the deductible" means that after you've satisfied the stated deductible in your policy, the insurance company will pay 80% of your covered claims -- up to the stated "stop loss" or "out-of-pocket" limit. After that, covered claims are paid 100%.

Let's say you have a medical expense of $1,000. If your deductible is $500, you pay that amount. Of the remaining $500 loss, your insurance would pay $400, you pay the other $100. When your next claim comes in, the insurance company will pay 80% of that.

On January 1 of the next year, everything starts over again.

If you're talking about homeowner's insurance and "coinsurance", the concept is very different.

Posted: 19 Dec 2010 08:35 Post Subject: insurance question

On a $20,000 in hospital medical bill for an individual with a policy that says $2,500 individual deductible with Maximum out of pocket expenses in calendar year of $5,000 plus, 70/30 coinsurance for inpatient / surgery mean to mean in simple to understand terms?

Thanks Rich

Posted: 20 Dec 2010 07:01 Post Subject:

$20,000 total bill
- 2,500 deductible
_______

$17,500 amount subject to coinsurance
x 0.30 coinsurance percentage
_______

$ 5,250 out of pocket expense

$ 5,000 stop loss/maximum out of pocket expense means the insurance company will pay the additional $250 plus 100% of all additional (later) medical expenses for the insured in the year.

Having said this, some policies include the deductible in the total out of pocket expense for the stop loss. But I doubt that is the case in your policy. It most likely will work as I have illustrated.

Posted: 31 Dec 2010 12:18 Post Subject: Health insurance

BCBs plan 90/10 plan. has a $250.00 deductible plus
a 10% coinsurance in Florida.The broker is pushing this plan. I found Preferred Medical of Coral Gables that has
no deductibles nor coinsurance. But the broker said the
company has problems. No complaints filed in Tallahassee concerning this company
who do I believe

Posted: 31 Dec 2010 04:47 Post Subject:

the broker said the company has problems



Ask the broker to prove his allegations, or talk to someone at Preferred Medical. I don't know anything about them, but I cannot find anything negative about them either. For what it's worth (not much), BBB of Coral Gables rates Preferred Medical Plan, Inc. "A+". Probably wouldn't be the case if they "had problems".

It is a violation of most states' insurance laws to "defame" an insurance company in a manner that causes persons to not do business with them. The reason your "broker" may have made the remark is that he does not represent Preferred Medical Plan, Inc., or wants to earn a (higher?) commission by enrolling you in the BCBS plan.

If the broker cannot document his accusation, then you should turn and RUN from that person, and file a complaint about them with the state Dept of Insurance. He may not have your best interest in mind . . . as the law requires.

Posted: 11 Jan 2011 06:05 Post Subject: Full roof replacement

Company to be given work by insurance company has asked us for the deductible amount before work has begun. Is this unusual ? Work should be finished before deductible is paid I believe.

Posted: 11 Jan 2011 06:08 Post Subject: Full Roof Replacement

Company has asked for payment of deductible even before roofing has begun (which will not be until spring due to wether conditions). Why???

Posted: 12 Jan 2011 02:48 Post Subject:

If the contractor is doing the job for the full value of the insurance company's estimate, then you owe the deductible. When it gets paid is between you and the contractor. Consider it a deposit on the contract. No deposit, no contract -- prices could change. Then where will you be?

Posted: 06 Apr 2011 12:35 Post Subject: medicare

i have part a and b and no other ins. i am 75 yr old if my bill is 500.00 how much will i have to pay? will it be less when i meet my deductible?

Posted: 06 Apr 2011 03:18 Post Subject:

You must be talking about Medicare Parts A&B. Part A primarily covers in-patient hospitalization (no doctor's bills). Part B primarily covers physician's and surgeon's and outpatient hospital expenses.

If you are hospitalized in 2011, there is a deductible of $1132 per benefit period (day of admission to 60th day after discharge from hospital), and medically-necessary services are generally covered 100% during the first 60 days of hospitalization.

If you see a doctor (in or out of the hospital), under Part B, there is a one-time deductible per calendar year ($162 in 2011) that is payable before Part B benefits begin. Once the deductible is satisfied, most Part B medically-necessary services are covered on an 80% (Medicare) / 20% (Medicare beneficiary) basis when using a "Medicare-approved" physician/surgeon (with additional limitations on billable amounts imposed by Medicare). You will pay a higher percentage of the bill from a non-approved physician/surgeon. You cannot be billed for any amount that exceeds Medicare's "approved amount" for any service (except that a non-approved provider may bill up to 115% of the approved amount, but Medicare only pays 80% of 90% of that amount -- very confusing, right?).

If you were not hospitalized, but simply saw a physician or went to the emergency room at a local hospital, and you have not had any other medical appointments in 2011, then you will be responsible for the $162 deductible, and about $68 (20% of the $338 difference), or total out of pocket expense of about $230. Future similar bills will be paid on the 80/20 coinsurance basis.

You might be able to significantly reduce your out of pocket expenses by enrolling in a Medicare Advantage plan in 2012 (open enrollment begins in November). You may be eligible to enroll in a Medicare Advantage plan (now until May 15), in which case your coverage under that plan would begin on July 1. It will not cover expense incurred prior to July 1. Talk to a local insurance agent about the available plans in your area.

Posted: 29 Apr 2011 03:19 Post Subject: deductible and coinsurance

I have 600 deductible, 80/20 coinsurance. Before surgery, I paid 350 to Doctor and 600 to hospital. After the surgery I paid 100 for tomography. I have 444 dollar pathology bill from hospital and my insurance says I had to pay all money because deductible...Didn't I paid deductible yet....Help please...

Posted: 29 Apr 2011 03:19 Post Subject: deductible and coinsurance

I have 600 deductible, 80/20 coinsurance. Before surgery, I paid 350 to Doctor and 600 to hospital. After the surgery I paid 100 for tomography. I have 444 dollar pathology bill from hospital and my insurance says I had to pay all money because deductible...Didn't I paid deductible yet....Help please...

Posted: 29 Apr 2011 07:44 Post Subject:

Melinda . . .

Your insurance company may not be aware of the payments you have made to the hospital or doctors. Have you supplied them with the information they need to see that you have already paid the deductible? Additionally, are you certain that the expenses you paid for are all covered expenses?

Although I don't know the sequence of events or timing of payments, or even what's actually covered, based on what you state, it does appear that you may have satisfied the deductible. Present all the bills you have that are marked "PAID" to your insurance company and see what they say.

Posted: 31 Aug 2011 05:59 Post Subject: primary ins and seconddary

I have an account total of 196.00 the primary ins paid 158.27 with adj of 9.80 leaving 27.93 in coinsurance so secondary ins acknowledges primary ins but only puts in a adjustment of 3.92 no payment but under deductibe on secondary it has 192.08. Do we have to acknowledge the secondary adjustment because secondary ins ded is greater than the primary ins coinsurane of 27.93

Posted: 31 Aug 2011 06:49 Post Subject:

No clue as to what you are talking about.

Posted: 24 Sep 2011 04:48 Post Subject:

A patient is a member of a health plan with a 15% discount from the provider's usual fees and a $10.00 copay. The days' charges are $480.00 What are the amounts the plan and the patient each pay

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