What is co-insurance and how does it work?
Co-insurance is the portion of your total medical claims, above the deductible, that you might pay if the medical provider does not “accept assignment” of your insurance. The common formula of “80/20 to $5,000” was developed generations ago by the Blue Cross associations for traditional medical insurance plans. Many variations are used today and a “50/50 to $2500” co-payment formula has become more popular in recent years.In the “80/20 to $5,000” co-insurance, for example, this means that you pay 20% of the first $5,000 of claims above the deductible. Your maximum expense for co-insurance in this example is $1000 ($5000 x 20%). The “deductible” plus the “co-insurance” taken together are typically referred to as your “maximum out-of-pocket expense”.In MSA plans, the maximum co-payment is limited by tax law (and adjusted annually) which overrides the basic co-payment formula hat would otherwise apply in the insurance policy.In practical experience, more than 95% of medical providers will
