How Do Medical Insurance Deductibles, Coinsurance and Copays Work?
Learning Objectives and CME/Disclosure Information
This activity is intended for healthcare providers delivering care to women and their families.
After completing this activity, the participant should be better able to:
1. Define a deductible 2. Compare a copay to coinsurance
Estimated time to complete activity: 0.25 hours
Susan J. Gross, MD, FRCSC, FACOG, FACMG
President and CEO, The ObG Project
Disclosure of Conflicts of Interest
Postgraduate Institute for Medicine (PIM) requires faculty, planners, and others in control of educational content to disclose all their financial relationships with ineligible companies. All identified conflicts of interest (COI) are thoroughly vetted and mitigated according to PIM policy. PIM is committed to providing its learners with high quality accredited continuing education activities and related materials that promote improvements or quality in healthcare and not a specific proprietary business interest of an ineligible company.
The PIM planners and others have nothing to disclose. The OBG Project planners and others have nothing to disclose.
Faculty: Susan J. Gross, MD, receives consulting fees from Cradle Genomics, and has financial interest in The ObG Project, Inc.
Planners and Managers: The PIM planners and managers, Trace Hutchison, PharmD, Samantha Mattiucci, PharmD, CHCP, Judi Smelker-Mitchek, MBA, MSN, RN, and Jan Schultz, MSN, RN, CHCP have nothing to disclose.
Method of Participation and Request for Credit
Fees for participating and receiving CME credit for this activity are as posted on The ObG Project website. During the period from Dec 31 2017 through Jan 25 2023, participants must read the learning objectives and faculty disclosures and study the educational activity.
If you wish to receive acknowledgment for completing this activity, please complete the post-test and evaluation. Upon registering and successfully completing the post-test with a score of 100% and the activity evaluation, your certificate will be made available immediately.
For Pharmacists: Upon successfully completing the post-test with a score of 100% and the activity evaluation form, transcript information will be sent to the NABP CPE Monitor Service within 4 weeks.
Joint Accreditation Statement
In support of improving patient care, this activity has been planned and implemented by the Postgraduate Institute for Medicine and The ObG Project. Postgraduate Institute for Medicine is jointly accredited by the Accreditation Council for Continuing Medical Education (ACCME), the Accreditation Council for Pharmacy Education (ACPE), and the American Nurses Credentialing Center (ANCC), to provide continuing education for the healthcare team.
Physician Continuing Medical Education
Postgraduate Institute for Medicine designates this enduring material for a maximum of 0.25 AMA PRA Category 1 Credit(s)™. Physicians should claim only the credit commensurate with the extent of their participation in the activity.
Continuing Nursing Education
The maximum number of hours awarded for this Continuing Nursing Education activity is 0.2 contact hours.
Several factors have changed the face of medical insurance, how patients pay for care, and how insurance companies structure their health plans. These factors include but are not limited to advancing medical technologies, complex and myriad federal and state regulations, and rising costs. Unfortunately, many of the key terms can confuse rather than provide clarity.
Coinsurance, copay, and deductible are top culprits. While each one affects the total cost paid for health care, they are not interchangeable. Knowing which is which should help provide a more general understanding of the billing aspects of medical care. Here is a brief explanation to help keep them straight.
A patient must pay a certain amount before medical insurance starts to pay. This amount varies widely from plan to plan. The time of year also greatly impacts the deductible. For example, even when a procedure or a test is covered by insurance, if the deductible has yet to be paid off, which is more likely early in the year, a patient can end up paying large sums out of pocket. Later in the year, when the deductible has been paid off, insurance would pick up the cost of testing. More on this below.
The payment made for health services by a patient in addition to that paid by an insurer. The amount varies according to the level of service, from routine office visit to specialist to emergency care.
The percentage of costs of a covered health care service an individual will pay (20%, for example) after paying off the deductible. This amount varies by plan.
Let’s say the health insurance plan’s allowed amount for an office visit is $100 and coinsurance is 20%.
If the deductible has been paid: The patient must pay 20% of $100, or $20. The insurance company pays the rest. If you haven’t met your deductible: You pay the full allowed amount, $100.
Using an example of a genetic test that costs $10,000
Allowable costs are $10,000
Out-of-pocket maximum: $6,850
The individual would pay all of the first $2,500 (deductible) and then 20% of the remaining $7,500, or $1,500 (coinsurance). Therefore, the total out-of-pocket costs would be $4,000: the $2,500 deductible plus the $1,500 coinsurance. If the total out-of-pocket costs reach $6,850, then that would be the maximum ‘out-of-pocket’ amount, including the deductible and coinsurance. The insurance company would pay for all covered services for the rest of the plan year.
The above example works for a provider who is in network, meaning the insurance company has agreed to pay those health care providers a certain amount of money for patient visits – usually a discounted rate. Because of those discounts, an individual, should pay less when seeing a health care provider in the network versus one who’s outside the network (unless there is are large deductibles to manage). For out-of-network providers, insurance may cover only a fraction of the cost of care – or none at all – depending on the plan.
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Disclosure of Unlabeled Use
This educational activity may contain discussion of published and/or investigational uses of agents that are not indicated by the FDA. The planners of this activity do not recommend the use of any agent outside of the labeled indications.
The opinions expressed in the educational activity are those of the faculty and do not necessarily represent the views of the planners. Please refer to the official prescribing information for each product for discussion of approved indications, contraindications, and warnings.
Participants have an implied responsibility to use the newly acquired information to enhance patient outcomes and their own professional development. The information
presented in this activity is not meant to serve as a guideline for patient management. Any procedures, medications, or other courses of diagnosis or treatment discussed or suggested in this activity should not be used by clinicians without evaluation of their patient’s conditions and possible contraindications and/or dangers in use, review of any applicable manufacturer’s product information, and comparison with recommendations of other authorities.
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