Coinsurance is how much you have to split the cost with the insurer after the deductible is satisfied. It is usually expressed as a percentage. For example, if you have a coinsurance of 10%, you will pay 10% of the cost after the deductible.
Think of co-insurance as splitting the cost of your covered medical expenses with your insurer. The amount you have to pay under your Integrated Shield Plan is a fixed percentage and only kicks in once you have met your deductible.
For instance, if your hospital bill is S$20,000 and your Integrated Shield Plan has a S$3,500 annual deductible and a 10% coinsurance feature, you’ll first have to pay the S$3,500 deductible, before paying 10% of the remaining eligible cost (S$16,500) which works out to an additional S$1,650. Your insurer will pay the remaining of the total eligible medical cost.
|Cost of health care
|Policyholder pays the annual deductible:
|Policyholder pays 10% coinsurance:
|S$16,500 x 10% = S$1,650
|Policyholder pays a total of:
|S$3,500 + 1,650 = S$5,150
As discussed, coinsurance is a percentage of the claimable amount that you have to pay. The larger the bill, the lower the coinsurance payable. Under MediShield Life, the coinsurance rate starts at 10% and goes lower as the claimable amount increases.
Claimable amount accumulated within a policy year
|1Inclusive of deductible
How much you need to pay depends on the “allowed amount” that a doctor can bill for a health care service. This amount is a discounted cost that doctors in your plan network agree to charge. Here’s an example of how coinsurance costs work: Ethan’s health plan has 80/20 coinsurance. This means that after Ethan has met his deductible, his plan pays 80% of covered costs, and Ethan pays 20%.
|The allowed amount for a doctor visit:
|The health plan pays 80% coinsurance:
|Ethan pays 20% coinsurance:
Before his visit, Ethan checked to make sure his doctor was in the plan network so he could avail the most coverage and pay less out of his own pocket. If Ethan visits a provider outside his plan network, he may have to pay more.
Most health insurance policies include an out-of-pocket maximum that limits the total amount the insured pays for care in a plan year. If you meet that limit, your health plan will pay 100% of all covered health care costs for the rest of the plan year. Costs you pay for covered health care services count toward your out-of-pocket maximum. This may include costs that go toward your plan deductible and your coinsurance. It may also include any copays you owe when you visit doctors.
Simply put, coinsurance, copays, and deductibles are your out-of-pocket expenses for covered medical care that aren’t paid by your insurer. A deductible is the initial amount you have to pay for eligible medical claim(s) made in a policy year before your coinsurance kicks in and your insurance company begins paying its portion of the bills.
Coinsurance and copay (copayment) are both ways that you share the cost of health care with your insurance plan. Copays (or copayments) and coinsurance are very similar except for one key difference: While coinsurance is a percentage of the total cost for health care, a copay is a small, flat fee you pay at the time of service. Not all plans have copays, but many plans have coinsurance.
There are a few ways to reduce your out-of-pocket costs. For instance, opting for panel specialists within your health plan’s provider network may give you access to more affordable consultation rates. Requesting for pre-approval of your claims before going for any planned medical treatments is also recommended as it provides you certainty of your claim outcome.
You may also choose to add on a rider plan to your Integrated Shield Plan to reduce your out-of-pocket expenses. One of the benefits of a rider plan is to provide coverage for deductible and coinsurance, subject to limits.
One should note, however, that as of March 2018, the Ministry of Health requires all new rider plans to include a co-payment of 5% or more so that everyone takes on a shared responsibility for their healthcare needs. Opting for panel specialists and requesting for pre-approval or seeking treatment at a restructured hospital can allow you to enjoy lower co-payment with your rider plan.