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Response to Warpy (Reply #6)

Thu Mar 20, 2014, 11:14 PM

7. "Before the deductible is reached, you'll have to pay 40% of the tab"

I thought I had to pay 100%, everything, until the deductible was reached. So like if my deductible is $3,000, and I have $3,000 in covered expenses, then I pay $3,000 and the insurance company pays le zilch.

If I had $4,000 of covered expenses, I would have to pay $3,000 plus 20% (or whatever the coinsurance percentage might be) of the remaining $1,000 (assuming my out of pocket maximum was not exceeded), for a total of $3,000 + 20% * $1,000 = $3200, and the insurance company would only pay $800.

So it is surprising to read that I might only have to pay as little as 40% until the deductible is reached. That would be great. But it's something I haven't seen before, and is contrary to the HealthSherpa example (
https://www.healthsherpa.com/learn/how-insurance-works ) (scroll down to a bit past the middle of the page to the last pretty blue and green diagram where the consumer pays the entire deductible, and then coinsurance -- the 20% -- kicks in). Ahh, here it is:



Now, according to the above link, copay is quite a different animal than coinsurance. Quoting from the healthSherpa link (all emphasis mine)

Coinsurance -- e.g. 20%, always a PERCENTAGE, I think --
"The percentage of a total medical bill that Bob pays after he has reached his deductible. The rate on coinsurance varies depending on the type of care. Bob pays his coinsurance until he reaches his Out of Pocket Maximum (OOPM). After that, the insurance company will pay all of Bob's remaining medical bills for the year."


Copay -- e.g. $30, always a DOLLAR AMOUNT, I think --
"A copay is a flat fee that Bob pays whenever he does certain things like visit the doctor or pay for prescription drugs. Bob will pay a different amount for each visit or drug. Bob pays his Copay when he sees a physician or orders certain prescription drugs. Copay is normally NOT part of Bob's deductible or Maximum out of Pocket, and Bob still has to pay copays even after he reaches his Out of Pocket Maximum."


In the below, I now use the word "coinsurance%" to reflect my understanding that coinsurance is always a percentage. And I use the word "copay$" to reflect my understanding that copay is always a flat dollar amount.

So in the above and the healthsherpa link and those diagrams, coinsurance% is kind of a simple thing -- it isn't an issue until the patient pays the entire deductible, then it kicks in and applies to the next tier of expenses until the OOPM is reached, and then it goes away.

Whereas the copay$ is kind of a wild card (in my view) -- its charged for every service that charges a copay$, is totally independent of deductibles and OOPMs, how much one has already spent, etc. etc. Even if one has reached the OOPM, it is charged, so that one's out of pocket expenditures will exceed the OOPM in this case (that is illustrated in the final diagram of the healthSherpa link where his total expenditures for the year is:
Premium + OOPM + copay


The link in #4 (thanks Valerief!) ( http://www.ehow.com/info_8785329_deductible-vs-copay.html ) also starts out confirming my understanding of deductible:

A deductible is the dollar amount of covered services you're responsible for before your insurance plan begins coverage.


But then it says this:

Deductible vs. Copay - Your insurance plan will specify whether you need to pay the deductible before your co-pays apply or whether you can pay your co-pay amount for some services, even if your deductible isn't met. Your health insurance plan, for example, may have a $250 deductible but all primary doctor visits have a $10 co-pay, even if your deductible hasn't been met.


So this description of copay$ is more flexible than the one described by HealthSherpa. HealthSherpa kind of indicates that the copay$ always applies, independent of how much or how little has been spent, and regardless of the deductible and the OOPM, and doesn't count towards satisfying the deductible or the OOPM.

Whereas EHow is saying is, well smoggy. They kind of make it sound like in some cases it's a privilege -- rather than having to pay for EVERYTHING up to the deductible, they are kind of saying for some services the insurance co. pays a portion, even if the deductible amount hasn't been reached.

Then EHow gets into Coinsurance%. They say it is a percentage, but they don't say anything about how it interacts with the deductible or the OOPM.

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Anyhoo, I think what I'm going to have to do is get rid of any rigid ideas in my head about what any of these things are (which makes screening impossible), but just select (for study purposes) some Gold PPO plan as a starting point and read all the details and hopefully they will be clear what they mean by each of these terms. Then do the same with the Gold PPO plan from another insurance company, and repeat. And compare and contrast their use of these terms.

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