You and your health insurance company are partners working together to pay for your health care.
This is called "cost sharing."
Cost sharing means ...
You pay some of your health care costs and your health insurance company pays some of your health care costs.
- If you get a service or procedure that's covered by a health or dental plan, you "share" the cost by paying a copayment, or a deductible and coinsurance.
- If you get a service or procedure that's not covered by a health or dental plan, you must pay for health services out of your own pocket.
Copayment. Deductible. Coinsurance.
These are all elements of Cost Sharing and the most important words you need to know to fully understand how your health insurance works.
And since they're really about money – your money – it's important that you feel comfortable around them.
Let's take a closer look:
Copay / Copayment
A Copay is the fixed amount you pay for your health services when you get them, like the fee you pay when you check out at your doctor’s office.
Example: You have a copay. Your doctor's visit costs $100. You only pay $20 each visit. Insurance pays the remaining $80.
Deductible
A Deductible is the first part of what you pay for your health care before insurance starts to pay for some of your health care. This is called cost sharing.
Example: Your health plan has a $1,000 deductible. Your deductible has not been met. Your doctor's visit costs $100. You pay $100. Insurance pays $0.
The $100 you paid was applied toward paying down your deductible. Now your deductible balance is now $900. Each time you pay for a service, you are paying down your deductible.
Coinsurance
Coinsurance is your share of your health care costs after you’ve met your deductible. It's the second part you pay for your health care before insurance pays for all of your health care.
Example: Your health plan has a $1,000 deductible. You have met, or paid, your deductible. Your health plan also has $1,000 coinsurance. After you've met your deductible, your coinsurance kicks in.
Your doctor's visit costs $100. You pay 30% ($30). Insurance pays 70% or ($70). The $30 you paid was applied toward your coinsurance. Now your coinsurance balance is $970.
Copays, deductibles and coinsurance make up your out-of-pocket costs or out-of-pocket maximum. They're the amounts you pay before your insurance company starts paying for covered services.
They are all elements of cost sharing. You and your insurance company are partners who work together to pay for your health care.
Your "out-of-pocket" payment may be less if you use a doctor or health care provider who is in your plan's network of doctors. This is known as "in-network."
We can help you find lots of ways to save on health care, like getting lower monthly health insurance premiums by choosing a plan with a smaller doctor network.
Compare networks by trying our Get a Quote tool. You'll see the real costs and there's no pressure to buy.
This is important! All health plans are not the same! Your plan may be very different from what we're showing here. Before you buy a plan, be sure to read all the details about your cost sharing responsibilities and talk to an insurance professional to learn more.
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