Deductibles and Coinsurance two confusing terms you need to know.
When you talk about the deductibles you got to talk about Coinsurance they go together like salt and pepper. What is a deductible? The deductible is the amount that you have to pay first. Think of bit sort of like self insurance for the first say $2500.00. After the deductible then the insurance company starts to pay that is called the Coinsurance. The Coinsurance is a part where you and the company coinsure but only on the first $10,000 typically. On a typical plan you are responsible for 30% and the company is responsible for 70% that gives you a hundred percent. Therefore your 30% of 10 thousand is $3,000.00. After that insurance company pays the rest. So if you wan to know your total out of pocket, if you wish to be hospitalized you have to add together your deductible plus your coinsurance. Let us use an example.
You need an appendectomy and for ease of use we will just say it is $30,000 that is probably a little high, you got your deductible. You are going to pay $2,500.00 the first $2,500 is yours. Then you are going to pay 30% of the first $10,000 or $3,000 then you are total allowed to pocket is $5,500. Notice you did not pay 30% of $30,000 or $9,000 you only paid 30 % of the first $10,000. So why have not you heard about Coinsurance? Well first of all it is pretty difficult to explain and a lot of agents just do not do it. In addition to that a lot of agents feel that well they do not really need to know that and it is a lot easier to sell an insurance if I do not tell them that they are responsible for the Coinsurance portion.
Co-pays are not related to the deductible. They are not related to the Coinsurance. Co-pays are immediately available. So when you think about Coinsurance you think about deductibles has nothing to do with your co-pays you get your co-pays right from the start.
So the summary the deductible is the amount that you pay first before the insurance pays and the coinsurance is a percentage you pay up to a stop lost amount. While we have covered a lot it is your choice now. You can study the written documents on Rich day health plans.com\blog or watch the videos there. Or better yet just give me a call.8887591738 I will explain it until you get it.
