Coinsurance:What is it?

Posted: Thu Sep 13, 2007 06:12 am Post Subject:

This is an insurance policy where the insurer and the insured share the cost incurred after the deductible is satisfied. This is sharing of risk. This is calculated on the basis of a formula.

Posted: Thu Sep 13, 2007 11:59 pm Post Subject:

Please let us know what type of insurance coverage you are referring to. The term "co-insurance" can appear in several different types of contracts: health insurance, property insurance and certain commercial policies.

Some more info will help us clarify our answers, and we want to make sure that you have the correct information!

InsTeacher 8)

Posted: Fri Sep 14, 2007 05:36 am Post Subject: What is co-insurance in health insurance policies?

Hi,

Thank you all for the prompt responses. I want to know what is the role of co-insurance in health insurances? Can I buy the policy without taking co-insurance? Will that be a good bargain? Pls. suggest. :)

Posted: Mon Sep 17, 2007 04:54 pm Post Subject:

Hi Susan,

Thanks for the clarification...here's some information that may help.

Co-insurance, also know as "percentage participation" is the portion of the medical bills that you are responsible for after you have met your deductible. As an example: Let's say that you incur a $2,000 medical bill that's covered by your medical coverage policy. Let's also assume that you have a $500 deductible and the "standard" 80/20 co-insurance arrangement. First you will have to pay the deductible if it hasn't already been met. So... $2,000 - $500 deductible = $1,500 still left to be paid. If you have an 80/20 coinsurance plan, the insurer will pay 80% of the remaining $1500, or $1,200, and you will be responsible for the remaining 20%, or $300.

Most policies also include a "stop-loss" limit, sometimes (inaccurately) referred to as "maximum out of pocket." This limits how much you will have to pay towards the co-insurance portions, and once the limit has been reached, the insurance company will normally pay 100% of the covered charges for the balance of the plan year.

Finally, I am not aware of any insurers that offer a policy with no co-insurance, or will pay 100% of the claim after just the deductible has been met. You may be able to find a contract that will pay a higher percentage than others, but this will cost you more in premium. Just like any insurance policy- the more you ask the insurance company to pay, the higher the premium. As an example, a $500 collision deductible on your car insurance would cost you more in premium than a $1,000 deductible. The same idea applies to medical coverage deductibles and co-insurance.

Hope this helps, let us know if you need anything else!

InsTeacher 8)