What does deductible and coinsurance mean?

Deductible

A deductible is a fixed amount you pay for covered health care services before your insurance starts to pay. Deductibles are typically applied annually, but some plans may have separate deductibles for different types of services, such as medical care and prescription drugs.

You must meet your deductible before your insurance will start to cover the cost of your health care services. Once you meet your deductible, your insurance will usually pay for a percentage of the cost of your covered services, up to the coverage limits of your plan.

Coinsurance

Coinsurance is a percentage of the cost of your covered health care services that you pay after you meet your deductible. Coinsurance is typically a fixed percentage, such as 10% or 20%, but it can vary depending on the type of service and your insurance plan.

For example, if you have a $2,000 deductible and a 20% coinsurance rate, you would be responsible for paying $2,000 of your covered health care costs before your insurance would start to pay. Once you meet your deductible, your insurance would pay for 80% of your covered services, and you would be responsible for paying the remaining 20%.

Deductibles and coinsurance can help to keep health insurance costs affordable for everyone. By requiring people to pay a portion of their own health care costs, insurance companies can spread out the risk and keep premiums lower.