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When trying to find affordable health insurance, it can be difficult to find the right policy. One of the most confusing aspects is the out-of-pocket cost you are expected to pay, above and beyond the monthly premium.
Most health coverage options include co-payments, co-insurance, or both. What’s the difference?
- Co-insurance is a percentage of the fee charged for an item or service. For example, if you have a 30% co-insurance percentage under your policy and a doctor normally charges $100 per visit, you will be responsible for paying $30 upfront. In many cases, this is the more expensive option. However, it is becoming more common among group health insurance plans, due to employers trying to reduce their cost burden.
- On the other hand, co-payments are a fixed amount. If your insurance company specifies a $15 co-payment for prescription medications, that is the amount you’ll pay the pharmacy each time you fill the prescription–regardless of how much the medicine actually costs. Sometimes, insurers have multiple tiers of co-payments: depending on the type of medication, doctor visit, or hospitalization, the copayment will be higher or lower.