CO-INSURANCE AND CO-PAY
Following our understanding of DEDUCTIBLES, we also need to understand CO-INSURANCE and CO-PAY. These last two terms imply a shared responsibility. As we have mentioned before, being insured means more than having someone else pay for medical expenses. In this note we will explain the CO- in CO-INSURANCE and CO-PAY.
CO-PAY is a fairly simple concept. Its a set amount to pay per visit to your doctor. This amount will vary per policy but is constant across a year. Your insurance will indicate your CO-PAY is $20.00 (for example) for every “visit” to the doctor. So whenever your doctor invoices a “visit” (visits are specific service codes, as opposed to sonograms or other procedures) to your insurance, the insurance will require that you pay the $20.00. Since its required, most doctor’s offices collect the copay at the time of the visit. As times have changed, and sometimes a “visit” code is not invoiced for, most insurance companies are requiring a copay per encounter with your doctor. This way, they pass part of the cost to the patient for any service they receive. In the past a sonogram would not require copays, nowadays even labwork requires a copay. Copay varies sometimes by service type and place of service. This, you should be diligent and check with your insurance policy so you understand how much you are required to pay per visit to your doctor or even laboratory or imaging center. CO-PAY amounts might change each year depending on your policy. CO-PAYS are usually raised year by year.
CO-INSURANCE, is a portion of the approved medical expense for which the patient or insured party needs to pay. This portion is usually a set percentage of the approved amounts. Commonly the insurance will pay 80% (eighty percent) of the approved service and the 20% (twenty percent) is to be paid by the patient or responsible party. CO-INSURANCE percentages vary by policy type. Indemnity policies, which normally are not based on contracts with the doctors, use coinsurance. PPO polices have them and so does HMO/POS policies.
CO-INSURANCE usually is applied after deductibles are met. Depending on the type of policy you might have a total OUT OF POCKET amount to meet for the year before the insurance would pay at 100% (one hundred percent) of the approved benefits. CO-INSURANCE assigns this patient responsibility, claim after claim until the total out of pocket amount is accumulated. This process resets itself either by calendar year or yearly on the date the policy started.
This explains the most basic patient responsibilities. There are further variations and nuances to look into, but these are written in specific policies and you as an insured party should look into them to better understand your benefits and your responsibilities.