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A fixed cost you need to pay for certain medical services, usually at the time of service. Office visits and prescription medicine often require copays.
A visit to the family doctor may require a $25 copay, while an emergency room visit may involve a larger copay. Pharmacy prescriptions often have a copay. Some services require both a copay and coinsurance.
The medical expenses you pay after your insurance has paid its portion of the bill. Coinsurance begins after you meet your deductible, and is usually a percentage of the amount your insurance pays.
You've reached your deductible for the year and have an MRI. The cost is $1,000. If your coinsurance is 20 percent, that means you will be responsible for 20 percent of that $1,000 bill, or $200.
The amount of money you pay out of pocket each year before your insurance will begin covering expenses. Deductibles usually start over at the beginning of each calendar or fiscal year.
If you have a $1,000 deductible, you pay the first $1,000 of your own medical expenses. This is called meeting your deductible. After that, your insurance will pay some of your medical expenses. You may still have to pay a portion of your expenses through copays and coinsurance.
These pre-tax contributions are commonly offered with a high deductible insurance plan and can be used for qualified medical expenses. Unused funds roll over from year to year and are available even if your insurance or employment changes. HSA plans are becoming a popular way to save and pay for healthcare costs.
The allowable charge is the amount of compensation your insurance company and provider agree to for medical services. A bill is paid in full when the allowable charge is paid plus any copay or coinsurance. The allowed amount also determines how much you pay in coinsurance. The billed charge is usually higher than the allowed charge.
In-network providers, also known as preferred providers, are clinics and physicians that agree to a fixed rate with your insurance company. Out-of-network providers have not agreed to fixed rates, which allows them to be flexible with what they charge you. Call around and get estimates before choosing a provider. You may end up paying less.
Some medical procedures require your insurance company's approval beforehand, called preauthorization. If preauthorization is required, but not received, your insurance may deny benefits. To be sure you're covered, always contact your insurance before moving forward with a treatment or procedure.
