Understanding Health Insurance Concepts: Cost Sharing (Deductibles, Copays, and Coinsurance)

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The amount of your health care costs that you pay out of your own pocket is often referred to as “cost sharing.”  This term typically refers to deductibles, copays, coinsurance, and other similar charges.  It does not include the cost of your premiums and non-covered services.


Deductible:  A deductible is the yearly amount you must pay before your plan will contribute to a covered service.  The deductible may not apply to certain services like routine doctor visits.  Often you will have an in-network deductible, an out-of-network deductible, and a pharmacy deductible.  Your in-network deductible can range between $0 and $6,850 for an individual policy.


Copayment:  A copayment is a fixed amount you must pay for a covered service.  For example, your plan may require you to pay $25 to see you primary care physician.  Plans typically do not count your copays towards your annual deductibles.


Coinsurance:  Coinsurance is the percentage of the cost of a service for which you are responsible.  For example, your plan may require you to pay 20% of the cost of a service and it will cover the remaining 80%.  Typically your plan will have different in- and out-of-network coinsurance levels.  For example, your plan may have a 20%/80% in-network coinsurance level, but a 40%/60% out-of-network coinsurance level.  Typically, Exclusive Provider Organizations (EPOs) and Health Maintenance Organizations (HMOs) will require you to pay 100% of your out-of-network expenses.



I joined OPIC as a staff attorney in 2011.  I specialize in life, health, and disability insurance law.  I know that consumers can find themselves frustrated with these insurance issues at very difficult times in their lives—during sickness, after an injury, and after the loss of a loved one.  I am grateful that I can utilize my expertise to educate and empower insurance consumers as they navigate these challenges.