Copays, Deductibles and Coinsurance Explained
Copays, deductibles and coinsurance all work together to limit your out-of-pocket medical expenses and help protect your finances.
Let's take a look at each of these terms, and how they affect your overall medical expenses.
Copays / Copayments
Most people are familiar with copays, a flat fee you pay toward services such as doctor visits or prescriptions. You walk into a doctor’s office, they often expect a copay. This is your initial payment for service, no matter what your visit is for.
With some Cigna plans, you will have a copay for prescriptions, and doctor or urgent care visits.
You may also select a Cigna plan that allows you the first few office visits with a copay, and then your annual deductible and coinsurance will apply to future visits. With these plans, you will not be charged a copay or coinsurance for in-network preventive services like annual checkups, mammograms and colonoscopies.
Cigna plans also allow you to see any doctor without a referral. With our quality network of providers you are sure to find the specialist you need. If you do go out-of-network, we’ll still provide coverage but, depending on your plan, a higher copay or your out-of-network deductible and coinsurance may apply.
This is the portion of your medical expenses that is not covered by a copay and you are responsible for 100%, until you reach your deductible. It's like car insurance. Should you need to, you pay your deductible and then insurance kicks in to help pay.
The basics about annual health deductibles:
- Expenses related to hospitalization, surgery and procedures are typically applied to your deductible first.
- Lab tests, MRIs, CAT scans, surgical costs, anesthesia, physical therapy, medical devices usually go toward your deductible first.
- Charges for mental health, chiropractic care and other services may also go toward your deductible first.
- Premiums are not applied toward the deductible. Deductible amounts are different for individuals and families. Deductibles are much lower if you see in-network versus out-of-network (outside the network) providers; if you go out-of-network, you will have an out-of-network deductible which is higher and separate from the in-network deductible.
Choosing a high- or low-deductible plan
In choosing a plan, you want the best value for your money. You ask: Which is better, a higher deductible or a lower deductible?
High deductible: To get a lower monthly premium, some people look for plans with a higher deductible. When does this work best? If you had very few medical expenses last year, you probably didn’t reach your deductible. If you feel that will stay the same for the coming year, a plan with a higher deductible may be the right fit.
Low deductible: For active families, a lower-deductible plan might be a good choice. If the kids are in sports—or someone has a chronic health problem, with lots of medical and emergency visits—it may be worth paying a higher premium to get a lower-deductible plan, with lower copays.
Some people get confused about copay versus coinsurance. Just remember, they are not the same thing.
When you reach your deductible, you must pay a percentage of the remaining costs—this is the coinsurance amount.
Let’s say you have a policy with 20% coinsurance. That means the insurance company will pay 80% of covered services after your deductible has been met and you pay the remaining 20%. But you won’t have to pay that 20% forever. You pay until you reach your out-of-pocket maximum—perhaps $6,350, depending on your Cigna plan. Then, Cigna will cover the rest of qualifying medical expenses for that calendar year.
Example: You have a $100,000 hospital bill, and a Cigna plan with a $2,750 annual deductible and 20% in-network coinsurance. You pay the $2,750 deductible plus 20% coinsurance until you reach your $6,350 annual out-of-pocket maximum.
The out-of-pocket maximum is a wonderful thing. Every Cigna plan has this feature. Check your plan to see if copays, deductibles and pharmacy costs accumulate to the out-of-pocket maximum.
Which is right for you?
Sign up during the Open Enrollment Period. Outside of Open Enrollment, you may be eligible to purchase insurance if you have a qualifying life event. Learn more about enrollment options. If you're an existing customer, Cigna can help you review your current plan—and see which blend of copays, deductibles and coinsurance will meet your needs. If you're new, review our plans online, then call us. Cigna will help you find the right fit by asking just a few questions.
For a full list of exclusions and limitations, view State Policy Disclosures, Exclusions and Limitations or review the Summary of Benefits for the plan you are interested in, which is located under Plan Documents.
Call Cigna at 1.866.438.2446, 8:00 am to 10:00 pm (ET), Monday through Friday. A licensed Cigna insurance agent will be happy to take your call—and explain everything in detail. We want to make sure you understand your health coverage, and help you select a plan that works best for you and your family.
If you are an Arizona resident interested in an individual HMO plan, please call 1.877.484.5967 for further details.
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