While the terms copay, deductible, coinsurance, and premium may sound familiar, there is much confusion as to what they actually mean. How exactly do they factor into paying for your health insurance costs?

Whether you need to get your yearly check up, plan to visit a podiatrist, or refill a prescription, these all will factor into the total cost of your health insurance plan.

We will examine the exact meanings and functions of copays, deductibles, coinsurance, and premiums. This can help you in determining the right health insurance plan that best fits your needs. 

 

Copayment

A health insurance copayment, more commonly referred to as copay, is a fixed amount of money that you pay upfront for a specific medical service or medication.

Copays are often associated with health insurance plans. This includes charges for services like doctor visits, prescription medications, and specialist appointments.

For example, let’s say you have a health insurance plan with a $30 copay for doctor visits. This means you will pay $30 out of pocket each time you visit your primary care physician.

Your insurance company will cover the remaining cost of the visit.

 

Deductible

A deductible is the amount of money you have to pay out-of-pocket before your insurance coverage kicks in. 

If you have a $1,000 deductible and your medical bill is $1,500, you’ll need to pay the first $1,000. Your insurance will cover the remaining $500. This amount is due to the first doctor/facility that bills your health insurance plan for services performed during the plan year. 

Deductibles are typically found in health insurance plans. However, they can also be included in other types of insurance policies, such as car or home insurance.

Let’s say you have a health insurance plan with a $1,500 deductible. If you’re admitted to the hospital and the total cost of your treatment is $10,000, you’ll have to pay the first $1,500 out of pocket before your insurance company starts covering the remaining $8,500.

Usually when you select a plan with a higher deductible, it will lower your premium, aka your monthly health insurance bill. 

A quick way to lower your health insurance costs is by choosing an insurance plan with the highest possible deductible that you can afford to pay in a calendar year.

 

Coinsurance

Coinsurance is a cost-sharing arrangement between you and your insurance company, where you pay a percentage of the cost of a covered medical service or medication. 

You will find coinsurance in most health insurance plans, and it typically includes charges for services like hospital stays, surgeries, and medical equipment.

For example, if you have a 20% coinsurance for a $100 medical bill, you will pay $20, and your insurance will cover the remaining $80.

Or let’s say you have a health insurance plan with a 20% coinsurance for hospital stays. If you’re admitted to the hospital and the total cost of your treatment is $10,000, you will be responsible for paying 20% of the cost, which is $2,000. Your insurance company will cover the remaining $8,000.

 

Premium

A premium is the amount of money you pay each month or year to maintain your health insurance coverage. This cost is separate from any deductibles, co-pays, or other out-of-pocket costs you may be responsible for.

Premiums are typically based on a variety of factors, including your age, health status, location, and the type of plan you choose. The amount of the deductible in your health plan can also impact your premiums. The higher the deductible, the lower your premium.

If you have a health insurance plan with a monthly premium of $300, you will pay $300 each month to maintain your coverage, regardless of whether you use any medical services during that time.

 

Copay vs. Deductible vs. Coinsurance vs. Premiums

In summary, copays, deductibles, coinsurance, and premiums are all important components of health insurance plans. Understanding these terms can help you choose a plan that fits your needs and budget.

It is important to note that the specific terms and amounts associated with these components can vary widely depending on the insurance plan you choose, so it is always a good idea to read the fine print and ask questions to ensure you understand your coverage.

 

 

What Health Insurance Plan is Best For You?

When comparing health insurance plans, it is important to consider the balance between copays, deductibles, coinsurance, and premiums. 

The relationship between your health insurance deductible and your premium is usually inverse. In other words, plans with lower deductibles tend to have higher premiums, while plans with higher deductibles tend to have lower premiums. 

This is because insurance companies take on more risk when they offer lower deductibles, and they charge higher premiums to offset that risk.

As for deductibles, you may want to select the highest deductible amount that you can afford to pay in a one year period.

When choosing a health insurance plan, it’s important to consider both the deductible and the premium, as well as any co-pays, coinsurance, or other out-of-pocket costs that may apply. 

Here is an example of how you might decide which plan is best financially:

Plan A:

• Monthly Premium: $300
• Deductible: $1,000
• Co-Pay: $25 for primary care, $50 for specialist

Plan B:

• Monthly Premium: $200
• Deductible: $5,000
• Co-Pay: $0 for primary care, $75 for specialist

In this example, Plan A has a higher premium but a lower deductible and lower co-pays. Plan B has a lower premium but a much higher deductible and higher specialist co-pay.

If you are generally healthy and do not expect to need many medical services in the coming year, Plan B might be a better choice because of its lower premium. However, if you have ongoing medical needs or expect to have a lot of medical expenses in the coming year, Plan A might be the better choice because its lower deductible and copays could save you money in the long run.

Ultimately, the best plan for you financially will depend on your unique healthcare needs and budget. It is important to carefully consider all the costs and benefits of each plan before making a decision.

 

What impacts the Cost of your Health Insurance Plan

Copays, deductibles, coinsurance, and premiums are just a few of the key terms you’ll encounter when researching health insurance plans. Understanding such terms can help you determine the best health insurance plan for yourself.

You can begin this process by determining your total health plan costs. Such factors that go into your total health care costs include your premium, deductible, copayment/coinsurance, and out-of-pocket costs.

This chat below can serve as a handy guide to familiarize yourself with these terms. This can help you in the process of choosing the best health insurance plan to fit your needs.

 

Copay / Deductible / Coinsurance / Premium 

	Definition	Example
CoPay	Fixed amount of money you pay upfront for a specific medical service or medication.	If your plan has a $30 copayment for doctor visits, this means you pay $30 each time you visit your doctor.
Deductible	A set amount you pay out-of-pocket before your insurance coverage starts paying.	If you have a deductible of $1000, you will pay your medical bills up to $1000 and then your insurance plan will kick in.
Coinsurance	A cost sharing arrangement between you and your insurance company.	If you have an 80/20 plan, your insurance company will cover 80% of your costs after you pay
Premium	Ongoing cost you pay to maintain your insurance coverage.	You pay $150 a month to maintain your health plan coverage and its benefits.

 

Ask A Doctor

If you are still looking for an explanation, you can always ask your doctor. 

Here at Appel Foot & Ankle Center, we offer the highest standard of care in podiatry and seek to make your visit stress-free and discover effective solutions for your foot pain. Make an appointment today and we will find remedies to resolve your foot and ankle problems so that you may live your life without pain and resume your favorite activities. You deserve to enjoy a quality lifestyle.