What is coinsurance and how does it work?
Coinsurance requires the insured to share in the cost of medical care. Under an 80/20 coinsurance provision, the medical expense plan pays 80 percent of eligible medical charges above any deductible. The insured is required to pay the remaining 20 percent. Other coinsurance arrangements, e.g., 70/30 or 90/10, are sometimes used. In the event of large or catastrophic medical expenses, an insured might suffer severe financial hardship due to the operation of the coinsurance clause. To compensate for this possibility, many major medical expense plans contain a coinsurance cap, or stop-loss limit. This provision places a limit on the insured’s out-of-pocket costs in a given year arising from the operation of the coinsurance clause. The size of the coinsurance cap generally ranges from $2,000 to $10,000, depending on the plan, although limits as low as $1,000 or as high as $25,000 are sometimes used. Once the coinsurance cap has been reached, all eligible expenses above this amount are paid
Related Questions
- Which fields on the UB-04 should be used to indicate Medicare coinsurance and deductible if the form locator 39 is used by the provider for something else?
- Can my prescription drug copayments be used to satisfy my calendar year deductible or coinsurance?
- Whats the difference between a copayment and coinsurance?
