These are the three cost-sharing terms patients confuse most often. Once you know which one applies, your bill becomes much easier to understand.
The amount you usually pay each year before insurance starts sharing more of the cost for many services.
A fixed dollar amount, such as $25 for a primary care visit or $10 for a generic prescription.
A percentage of the allowed amount, such as 20 percent after the deductible is met.
Imagine you get a scan with an allowed amount of $1,000. If you still have deductible left, you may owe most or all of that amount first. After the deductible is met, you might owe 20 percent coinsurance, which would be $200. A copay works differently because it is a fixed amount rather than a percentage.
Depending on the service, a plan can use more than one of these together. That is why the EOB matters. It shows which rule was actually applied to the claim.
Often uses a copay, such as $25, instead of a percentage-based coinsurance amount.
Often hits the deductible first and then may leave you with coinsurance after that.
May use tiered copays or coinsurance depending on whether the drug is generic, preferred brand, or specialty.
Many people assume "covered" means "free" or "cheap." It does not. A service can be covered by the plan and still leave a significant deductible or coinsurance amount for the patient.
The safest approach is to ask about network status, whether prior authorization is required, and what cost-sharing rule will likely apply before the visit or procedure happens.
Patients get into trouble when they only ask "Is this covered?" without asking "How will it be covered?" Those are very different questions.
These guides cover the next questions patients usually have after this topic.
Continue learning about how to read an explanation of benefits (eob).
Read articleContinue learning about in-network vs. out-of-network.
Read articleContinue learning about what is prior authorization?.
Read article