Health Insurance Cost

• In general, the higher the premium of a health insurance plan, the lower the out-of-pocket costs, which include co-insurance payments, required to utilize the benefits of the plan. Plans with more expensive premiums may not even require co-insurance in order to receive medical benefits.
  
  

Definition

• A co-insurance is a cost-sharing requirement under a health insurance policy that requires the insured individual to pay a percentage of the cost of any covered service. The amount or percentage appears on the policy. According to the Hereford Physical Therapy and Sports Medicine website, under Medicare Part B, a beneficiary must pay a co-insurance of 20 percent of the allowed charges. Many HMOs offer 100 percent insurance, meaning no co-insurance, for preventive care or routine care services, as long as they are provided within the HMO's network.
  
  

Co-insurance vs. Co-payment

• The terms co-insurance and co-payment can often be confused. A co-insurance amount varies, usually from 10 percent to 30 percent. This depends on the services provided and the allowable amount for each service. A co-payment is a cost-sharing arrangement wherein the policyholder pays a flat amount for a specific service, such as a fixed amount for every office visit or for each prescription drug. This amount does not vary with the cost of service provided, unlike in a co-insurance, which is based on a specific percentage per cost of service.