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. 

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 

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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/.