You may be in for some not-so-fun surprises if you think your health insurance is going to fully cover your healthcare costs after you pay your premiums and meet your annual deductible.
This post is a part of our 30 Days of US Healthcare series. You can watch all the videos in this series on YouTube and learn more about the content behind the videos here on our blog.
BY THE NUMBERS
Co-insurance is a reality for 68% of workers insured in the US.1
The average co-insurance rate for hospital admission or outpatient surgery is 20%.1
The average co-payment is $344 per hospital admission.1
The average co-payment for in-network primary care physician office visits is $27.1
HOW DOES CO-INSURANCE WORK?
Let’s look at a scenario where you pay 20% co-insurance, and you have a $100 visit to the doctor.
💰 If you haven’t yet met your annual deductible, then you owe $100.
💰 If you have met your annual deductible, you pay $20.
That’s co-insurance. Yes, you already paid your premiums AND paid for all of your healthcare costs up to your deductible, but you still aren’t off the hook.
HOW DO CO-PAYMENTS WORK?
Your co-payment (or co-pay) is a set amount that you pay for a visit to a doctor, going to the hospital, or picking up a prescription.
You typically will be asked to pay this amount at your appointment or when pick up your prescription.
💰 Let’s say your co-payment is $27 for an office visit.
💰 Even if you have already met your deductible, you still pay your co-payment.
To make confusing matters even more confusing, your co-pay amount can be different for prescriptions, tests, and visits to specialists.
DO INSURANCE FEES AFFECT WELL-BEING?
Let’s illustrate this scenario with an example from Healthcare.gov.2 You have a serious health situation with a $12,000 healthcare bill.
Here are the terms for your health insurance policy:
💰 Co-payment: $27
💰 Deductible: $3,000
💰Coinsurance: 20%
You pay $27 (because that’s your co-payment, and you started with an office visit).
You pay $3,000 (because that’s your deductible, and your co-payment did not count toward your deductible).
Then pay 20% of the remaining $9,000 (because that’s your coinsurance).
So you are paying $4,827 — your $3,000 deductible plus your $1,800 coinsurance and your $27 co-payment.
THIS IS WHERE WELL-BEING COMES INTO PLAY: Co-insurance and co-payments, when combined with monthly premiums and annual deductibles, can be financially devastating. When only 64% of US adults can cover a $400 unexpected expense3, it’s becoming clear why we may be deciding to skip or delay seeking medical treatment.4
1 “2022 Employer Health Benefits Survey – Section 7: Employee Cost Sharing.” KFF, 27 October 2022, www.kff.org/report-section/ehbs-2022-section-7-employee-cost-sharing/.
2 “Coinsurance – Glossary.” Glossary | HealthCare.Gov, www.healthcare.gov/glossary/co-insurance/.
3 “Report on the Economic Well-Being of U.S. Households in 2022 – May 2023.” Board of Governors of the Federal Reserve System, www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in-2022-executive-summary.htm.
4 “Americans’ Challenges with Health Care Costs.” KFF, 14 July 2022, www.kff.org/health-costs/issue-brief/americans-challenges-with-health-care-costs/.
