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How does a deductible, co-pay and co-insurance work?

How does a deductible, co-pay and co-insurance work?

Nothing is more important than health. As the saying goes “your wealth is your health”, being healthy is the most fundamental need shared across the globe.

As such, choosing the best health care service and insurance plan is a great way to mitigate medical costs and protect yourself all-year round. Although expenses incurred for doctor visits or other medical services are usually covered by health insurance plans, deductibles may apply.

Understanding health care can be confusing. This is the reason why it is helpful to know the meaning of commonly used terms such as co-pays, deductibles, and coinsurance. Being familiar with this terminology may help you understand when and how much you need to pay for your health care.

In this article, we will explain the differences between a deductible, co-pay, co-insurance and how they work. We will also shed the light on the distinction between a co-pay and a co-insurance.

What is a deductible and how does it work? 

A deductible is the amount your pay for a covered medical service before the insurance companies refund you.

In the case where you have a $4,000 deductible, you would have to pay first-hand and then wait for your insurance to pay for it.

Following the payment of your deductible, you will often pay a co-insurance or co-pay. Keep in mind that lower insurance premiums usually correlate with higher deductibles. Similarly, high insurance premiums mean lower deductibles.

What is a co-insurance and how does it work?

A co-insurance represents the percentage of costs you must cover yourself after you have already paid for your deductible. Your health insurer will pay for the remaining amount. Keep in mind that co-insurance solely applies to covered services.

For example, let’s assume that you have to pay for a $10,000 medical treatment. You have paid your deductible of $2,000 and have a co-insurance of 20%. In this case you will pay 20% of the remaining $8,000.

What is a co-pay and how does it work?

A co-payment is a fixed amount that you pay for a medical service. It is a set amount of dollars and not a percentage. Keep in mind that co-pays will not count towards your deductible but will count when it comes to your yearly out-of-pocket limit.

Your insurance plan rules what your co-pay is for various types of medical services throughout the year. It consists of a flat fee that is paid every time you fill a prescription or go see a doctor.

It is important to understand that not every plan has a co-pay. Some insurance companies provide a mix of co-pay and coinsurance/deductible.

What is the difference between a co-pay and a coinsurance?

Co-pay is a definite amount you pay when visiting your medical practitioner or getting a prescription done. Coinsurance is the percentage of costs remaining you must pay after you’ve covered your deductible.

How to take advantage of co-pay, coinsurance and deductible?

There are many ways to minimize your out-of-pocket costs when it comes to healthcare. One of the simplest one is to keep your doctor’s office informed if anything changes within your insurance plan.

Another way to reduce the costs is to let your medical practitioner know about your insurance plan. Indeed, most doctors usually do not take your insurance plan into account when it comes to delivering a treatment recommendation. By informing your trusted practitioner, he may provide a more affordable treatment decision.

It could also be wise to call your insurer to know more about the extent of your health coverage. You may ask specific questions regarding potential out-of-pocket expenses for your scheduled medical visit.

How can BLACAZ. help with co-payment, co-insurance & deductible?

Although it is recommended to get a good grasp on what is a co-pay, coinsurance and deductible, it may also be confusing to understand the intricacies of each term.

There are many ways to reduce your incurred costs such as the ones previously explained. However, insurance plans vary and so do strategies to minimise your expenses. Our team is dedicated to helping you along the road and advising you to adopt the best strategy when it comes to health care insurance.

You may contact us today to find more about health care possibilities with BLACAZ. Besides, feel free to ask questions regarding co-pay, coinsurance and deductible and our team of experts will gladly answer them.

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