When it comes to health care insurance and medical claims, there are a few terms that an individual must know about. These terms are—co-pay, coinsurance, and deductibles.
Definition of Coinsurance
Coinsurance refers to the amount that an insured individual is required to pay after paying the deductibles. The coinsurance amount is generally paid in a fixed percentage as set by an insurance company in the health care insurance plan.
While referring to the patient the Healthcare.gov defines coinsurance as “patient’s share of the costs of a covered health care service, calculated as a percentage (for example, 20%) of the allowed amount for the service. You generally pay coinsurance plus any deductibles you owe. (For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your coinsurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.)” https://www.healthcare.gov/sbc-glossary/#coinsurance
One must not confuse coinsurance with co-pay and deductibles. These three terms may appear to be similar but they are completely different. Following is the definition of co-pay and deductibles.
- Concerning the patient, the Healthcare.gov defines deductibles as “an amount you could owe during a coverage period (usually one year) for covered health care services before your plan begins to pay. An overall deductible applies to all or almost all covered items and services. A plan with an overall deductible may also have separate deductibles that apply to specific services or groups of services. A plan may also have only separate deductibles. (For example, if your deductible is $1000, your plan won’t pay anything until you’ve met your $1000 deductible for covered health care services subject to the deductible.)”
- The term copayment or co-pay is defined as “a fixed amount (for example, $15) you pay for a covered health care service, usually when you receive the service. The amount can vary by the type of covered health care service.”
Coinsurance for Medicare
The Centers for Medicare and Medicaid Services (CMS) outlines the guidelines for coinsurance payment for Medicare programs in the third chapter of Medicare General Information, Eligibility, and Entitlement manual.
- Medicare Part A Coinsurance: As per CMS the coinsurance for inpatient hospital is not applicable for the first 60 days. The coinsurance for 60+ days is as follows:
- 61st- 90th Days: 1/4 of inpatient hospital deductible on per day basis. So, you would pay $352/day for the year 2020.
- 60 Lifetime Reserve Days: 1/2 of inpatient hospital deductible on per day basis. So, you would pay $704/day for the year 2020.
- SNF Coinsurance 21st- 100th Days: 1/8 of inpatient hospital deductible on per day basis. So, you would pay $176/day for the year 2020.
- Medicare Part B Coinsurance: Coinsurance of 20% is required to be paid once the deductible has been satisfied. The deductible for the year 2020 is $198 which is split into pro-rata amounts for two— $140.46 (first month) and $57.54 (second month).
For patients, coinsurance is beneficial in availing better medical services. However, for a medical institution is it beneficial in availing some part of reimbursement from the patient.
