How Does Coinsurance Work?
Coinsurance, as mentioned earlier, is the percentage of the treatment cost that you have to bear. It is a form of cost-sharing between you and the insurance provider. The coinsurance is usually a fixed percentage of the treatment cost. However, the coinsurance terms only apply after you (the policyholder) have reached your deductible amount. Let’s understand how coinsurance works with an example.
Example of Coinsurance
Let us assume that the coinsurance term of your health insurance plan is in the 80/20 ratio and that your plan has an annual out-of-pocket deductible of ₹2,000. Now, say that you suddenly require an urgent surgery early in the year that will cost you ₹50,000. Since you may not have met your deductible amount this early in the policy period, you will first pay the ₹2,000 of the total bill. After meeting the ₹2,000 deductibles, you will then be responsible only for the coinsurance payment i.e., 20% of the remaining bill amount, which will be ₹9,600 (20% of ₹48,000). Your health insurance provider will cover the remaining 80% of the treatment cost.
Later in the year, if you need to undergo another expensive medical treatment, your coinsurance clause will come into effect immediately if you have met your annual deductible previously.
How Does Coinsurance Help Me?
If you are considering buying a health insurance plan with coinsurance, the main benefit it offers you is lower premiums. If you opt for coinsurance in health insurance, where you pay a fixed percentage of your medical costs and your health insurance policy only pays the remainder, your monthly premiums towards the policy will be lower.
What is Coinsurance After Deductible?
As we saw in the example discussed in the previous section, the coinsurance clause in your health insurance will begin only after you have met your deductible amount. This means that you will have to pay for your medical costs (excluding certain covered services) till you reach your deductible. Once you’ve reached your health insurance deductible, you will only have to pay the fixed percentage of the medical costs as per the coinsurance clause, and the rest will be covered by your insurance provider.
Read More: Difference Between Copay, Deductible and Coinsurance
Even though opting for coinsurance offers you lower health insurance premiums, your out-of-pocket expenses during medical treatments will go up with such a cost-sharing clause. This can lead to an unnecessary financial burden during medical emergencies. Hence, you must compare health insurance plans available in the market before buying a policy, read all the terms of the health insurance plan you are opting for, and make an informed decision.
Now that you are well-versed with the coinsurance meaning in a health insurance plan, it is time you secure your health with the plan of your choice! Browse the health insurance plans available on Bajaj MARKETS which come with a host of benefits.