by Guest » Fri Sep 20, 2013 06:03 am
Just this morning our agent uttered the term as we were discussing some good health insurance plans with him. I was a bit hesitant, so I didn't ask him. What is this coinsurance all about?
Thanks in advance!
Thanks in advance!
Posted: Mon Sep 23, 2013 07:21 pm Post Subject:
I was a bit hesitant, so I didn't ask him.
And if the physician said, "Your esplanade refractus needs to be removed" would you have hesitated to ask what that was?What is this coinsurance all about?
Coinsurance is all about what you pay as a share of the cost of your health care expenses (%%). A plan with coinsurance usually includes a deductible amount ($$) that must be paid first before any coinsurance takes effect.EXAMPLE: Your "BRONZE" health insurance plan has a $4,500 deductible and 40% coinsurance, with a $6,350 out-of-pocket maximum. Your premium is $300 per month. What does this mean?
It means you pay $300 per month just to have insurance. Then you pay the first $4,500 of your (non-preventive care) reasonable and necessary medical expenses each year. After your bills add up to $4,500, you pay 40% of the next $4,625 until you've paid another $1,850 ($4,500 + $1,850 = $6,350 . . . the out-of-pocket limit). After that, but only until December 31, the insurance company pays 100% of your necessary and reasonable medical expenses. On January 1, the meter is reset to $0, and it starts all over again (except your premiums will probably be higher because you are one year older).
In this scenario, your maximum total cost of health care in one year is a minimum of $9.950. $3,600 (premiums) + $4,500 (deductible) + $1,850 (coinsurance -- 40% of $4,625) = $9,950. (You pay 100% of all non-medically necessary expenses, such as elective cosmetic surgery, or over-the-counter medications).
According to this illustration, you have incurred billable medical expenses of $9,125, and paid $9,950 for the privilege. A net loss of $825. Would it be less costly to pay the $95 penalty and not pay insurance premiums in 2014?
No one can answer that question for you. Can you negotiate the same billing rates from service providers that the insurance companies do? Probably not. Can you predict with certainty that your medical expenses will not exceed $9,125? No.
Insurance is a trade-off. You bet you'll need it more than the amount of premiums and other costs you pay, and the insurance company bets you won't. In most years, the insurance company will win the bet, but not in all years. One broken ankle, with surgery, can easily cost $30,000 with ER and hospital, surgeon, anesthesiologist, radiologist, laboratory, and physical therapy. To limit that exposure to just $9,950 is a pretty good "return on investment."
So we pay our premiums in exchange for the peace-of-mind knowing that we are covered for many, if not most or all, health care expenses we will incur in one year. But life is always better when we have no insurance claims.
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