There are so many “C” words in the health insurance industry — copay, coverage, coinsurance. We’ve put all the information you need to know about coinsurance together to help you better understand why coinsurance is important and how it might be helpful for you.
What is coinsurance?
Coinsurance is the amount of a medical cost (such as the cost of a therapy session) that you must cover. Your insurance plan will pay for some portion of your medical costs, usually after you meet the deductible (the amount that you have to pay before the insurance coverage kicks in). The coinsurance, which is typically expressed as a percentage, determines what you versus the insurance company will pay towards a full medical cost. Typically, this percentage is the amount of the medical bill that you pay.
For example, if your coinsurance for a therapy session is 20%, that means that out of a $100 bill you pay $20 and the insurance company pays $80.
Where can I find out what my coinsurance is?
Check out your Summary of Benefits and Coverage to figure out how much your coinsurance will be. (This summary is usually provided as a PDF by the insurance company when you enroll in the plan.) Note if you must meet your deductible before this coinsurance begins. If you have issues accessing the Summary of Benefits or need additional support in learning about your coverage, call the customer service number on the back of your insurance card.
What’s the difference between coinsurance and a copay? Which one is better?
While coinsurance is the amount of the session or appointment bill that you pay for, a copay (or copayment) is a set rate that you pay to access services. A copay might look like paying $25 each time you see your therapist. It is possible to have both a copay and owe coinsurance — check your Summary and Benefits to see if this is the case for you.
Is it good to have a 0% coinsurance?
It’s great to have 0% coinsurance. This means that your insurance company will pay for the entire cost of the visit or session. But often, you first have to meet your deductible in order for the coinsurance to kick in. Read on below to find out more about deductibles.
Important note: Most Summary of Benefits will indicate the percentage as the coinsurance amount (e.g. "15%" indicates a 15% coinsurance). However, some insurance plans will have the opposite listed, meaning the amount that the insurance plan covers (e.g. they may list "70%" to indicate that the insurance company covers 70% and you owe a 30% coinsurance). If you notice a high percentage, be sure to check with your plan provider to clarify what this percentage means.
What does it mean to have a 100% coinsurance?
Unfortunately, if you have a 100% coinsurance, this means that you are responsible for the entire service fee. This will be paid out-of-pocket and likely does not have any eligibility for reimbursement.
How do coinsurance and deductibles work?
A deductible is the amount set by your insurance plan that you must pay on your own, out-of-pocket, before the insurance company starts helping you pay for costs. For example, if you have a deductible of $1,000, this means that you must pay for $1,000-worth of services before your insurance company starts covering your costs.
A deductible encompasses all medical costs, so you can reach your deductible by seeing various providers (primary care, specialists, therapists) or by paying for your prescriptions or medical equipment. Often, coinsurance rates begin after you meet your deductible or pay the deductible amount. If you see that your coinsurance rate for a therapist is 50%, check the details to see if this is before or after the deductible.
Does coinsurance go towards the out-of-pocket maximum?
Yes, it does! An out-of-pocket maximum or limit is the highest amount of money that you can pay within a year, determined by your insurance plan, before the insurance company pays for the entirety of your care. For example, if you have an out-of-pocket maximum of $5,000, once you pay $5,000, the insurance company will pay for any subsequent visits, sessions, or prescriptions. And fortunately, copays and coinsurance payments count towards this number!