The most important question for you as a consumer to ask is “In the worst case scenario, what is my maximum out of pocket”?

The answer is “your deductible plus your co-insurance”. Co-insurance is the part of your policy after the deductible and before the insurance company pays 100%. “Co”, means both you, and the insurance company participate in payment to the provider of service. For example, providers can be hospitals, physicians, or lab work.

Many clients ask me, “Evelyn what is this 80/20 or 70/30 stuff?” The answer is, “this is your co-insurance, and you are the low number”.

HERE IS THE SCENARIO ON A $4000 HOSPITAL BILL:

If you have a $2000 deductible and you are on an 80/20 with a maximum out of pocket of $4000, this means you would owe the first $2000 (deductible), and 20% of the balance bill or another $400. For the remainder of the calendar year you would owe $1600 on your co-insurance or 20% of any bills (co-pays not included) until you reach the $1600. Once you do, you are done for the year. So, if your next bill was $1000, you would owe $200, and have $1400 remaining on your co-insurance.

I hope this helps as I often hear from prospective clients, “I do not want one of those 80/20’s”!

What the prospective client does not understand is that most PPO policies have co-insurance, and their “fear” is misplaced as “their thinking or concern is” … paying 80% or 20% of $100,000 or $80,000 or $20,000. This is just not the case. The difference in an 80/20 or 70/30 is only $100.

In summary co-insurance is not a big expense.

Should you have questions I can help you answer, do not hesitate to post  under the comments section or send me an email directly at:  evelyn@prescribemeinsurance.com.  I am happy to help!