WHAT TO KNOW ABOUT COPAYS, DEDUCTIBLES, AND COINSURANCE
What is a copay?
A copay (or copayment) is a flat fee that you pay on the spot each time you go to your doctor or fill a prescription. Let’s say you hurt your back and go see your doctor. Or you need a refill of your child’s asthma medicine. The amount you pay for that visit or medicine is your copay. Your copay amount is printed right on your insurance card. Copays cover your portion of the cost of a doctor’s visit or medicine.
Do I ever not have a copay?
If your health insurance plan pays 100% for annual check-ups and preventive care services, you may not have a copay for those visits. For sure, you don’t have a copay when you hit your yearly out-of-pocket maximum.
What is a deductible?
A deductible is the amount you pay each year for eligible medical services or medicines before your insurance plan kicks in. For example, if you have a $1,000 yearly deductible, you’re on the hook to pay the first $1,000 of your total eligible medical costs.
What costs count toward my annual deductible?
Many costs for eligible medical services count toward your deductible. Examples include bills for hospitalization, surgery, lab tests, MRIs, CAT scans, anesthesia, physical therapy, medical devices like pacemakers, mental health care and chiropractic care.
What costs don’t count toward my annual deductible?
In most cases, copays don't count toward your deductible. Premiums don't count toward the deductible.
What else do I need to know about deductibles?
Deductibles for families and individuals are different.
How do I decide what deductible amount to pick?
Let’s say you’re mostly healthy and don’t expect to need costly medical services during the year. Then, a plan that has a higher deductible and lower premium may be a good choice for you.
On the other hand, let’s say you know you have a medical condition that will need care. Or you have an active family with children who play sports. Then, a plan with a lower deductible and higher premium that pays for a greater percent of your medical costs may be better for you.
What is coinsurance?
Coinsurance is a portion of medical cost that you pay when your health plan kicks in. Your plan kicks in after you hit your deductible. Coinsurance is just a way of saying that you and your insurance carrier each pay a share of eligible costs to add up to 100%.
For instance, if your coinsurance is 20%, you pay 20% of the cost of your medical bills. Your health insurance plan will pay the other 80%. Here’s an example. Let’s say you hit your annual deductible in June. In July, you need an MRI that costs $2,000. Your coinsurance share is 20%. That means you need to pay $400 ($2,000 x 20%). Your insurance company pays the other $1,600. The higher your coinsurance percentage, the higher your share of the eligible cost is.
How long do I have to pay copays and coinsurance?
You don’t have to pay copays and coinsurance forever. You only pay until you hit your out-of-pocket maximum. This is the most you could pay for covered medical expenses in a year. This amount includes money you spend on deductibles, copays and coinsurance. Once you reach your annual out-of-pocket maximum, your insurance will pay your covered medical and prescription costs for the rest of the year.
Differences between copays and coinsurance
Paid each time you visit your doctor or fill a prescription
Paid when your insurance plan kicks in.
Your insurance plan kicks in after you hit your deductible.
Fixed dollar amount
Actual dollar amount varies. You pay a portion of the total cost
In some cases, count toward deductible
Don't count toward deductible
Paid on the spot at the time of the service
You’re sent an Explanation of Benefits (EOB) from your health plan after you get service
What plans does Cigna offer?
Find out about the plans Cigna offers:
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