Life & Health Insurance/co insurance


I am confused about the co insurance and co payment terms. I've looked it up on the internet and only get more confused.

My plan has a 20% co-insurance. So do I pay 20% of the cost of my plan or 20% of the bill?

Hello, Joyce:

As an example, let's say you have a $2000 deductible policy with 80%/20% co-insurance, with office visits costing $20 co-payment per visit, $50 co-payment for a specialist visit. The policy in this example has a $6000 maximum out of pocket limit, meaning the most that you are responsible to pay out of your pocket in a given year for all of your medical expenses is $6000. (The $6000 figure does not include premiums paid for the policy, but does include any deductibles or co-insurance.#

One day you awake and don't feel well, say an ear infection, and off to your general practitioner you go, paying the $20 co-payment for the visit. Your doctor suspects there may be more than a simple infection involved, and recommends an ear/nose/throat specialist. You go to the specialist, and for this visit you pay $50. Neither appointment requires that you meet your $2000 annual deductible first, or 20% co-insurance, you've simply spent $70 for two opinions thus far. Unfortunately, the specialist determines that you need surgery, the cost of which is $100,000. You are responsible for $6000, #max out of pocket,# of the $100,000 bill. You pay the $6000, have the surgery, and all is well.

Several months later you slip and break your wrist, #this just hasn't been your year Joyce!# The bill to fix you up, $4000. You are responsible for $0, you have already met your deductible and co-insurance for the year due to the cranial surgery.

Now it's 16 months later and you have not met your annual $2000 deductible, but are facing a $5000 bill for a broken arm. Of the $5000 bill you must first pay your $2000 deductible, and then 20% of the remaining $3000, or $600. The broken arm will cost you $2600 in this example, with $3600 remaining of your annual maximum out of pocket, #$6000-$2600=$3600.)

I have either answered your questions clearly and concisely, or made things worse! Hopefully the former. In the event that I have made things more confusing, please feel free to write or call with any additional questions you may have.

Thank you.

Mike Higgins

Life & Health Insurance

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Michael Higgins


All questions pertaining to health insurance, whether group, individual/family, student, child-only, COBRA, HIPAA, Portability, dental. No expert knowledge in areas such as life insurance, disability, workman's compensation, auto, etc.


34 years as owner of health insurance agency, primarily dealing with Blue Cross Blue Shield of Arizona.

College, Business Administration.

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