So what is the difference between coinsurance and deductible? These two terms will probably pop up when you are thinking of buying a hospitalisation insurance plan (or termed as health insurance in some countries) or what is also known as an integrated shield plan in Singapore.
Well, a simple way to understand it is to treat the coinsurance and deductible as money that you will have to pay for your medical bills even though you have insurance coverage. The reasons coinsurance and deductible exists is probably to keep the cost of insurance low and affordable while preventing individuals from exploiting the medical system and the insurance coverage they enjoy.
A deductible is similar to what is the known add excess in motor insurance. This basically means the amount of money you will have to pay FIRST before the insurance company allows for any claims. For example, if the deductible is stated as $2000, and your hospital bill is also $2000, you don't get to claim any money since you will be expected to foot the first $2000 for any medical bills.
I guess the deductible tries to prevent petty claims since one is expected to co-pay for your hospitalisation bills, you are less likely to get yourself warded or hospitalised just for a minor ailment. Knowing that you have to foot the first few thousand dollars of the hospital bill, you are less likely to abuse the system and get yourself warded everytime you get a cold.
Next. Coinsurance. This is usually stated in percentage terms. Common to see 10% or 20% stated. What this means is that after paying the deductible, there is still a coinsurance payment where you are expected to pay a percentage of the hospital bills while the insurer pays the rest. So let's say the bills add up to $10000 with a $2000 deductible and 10% coinsurance, a person will have to pay the first $2000 plus 10% of the remaining $8000 bill. This means he/she pays $2800 out of their pocket while the insurer pays the remaining $7200 of the bill.
Some medical insurance plans actually allows you to buy riders to cover the coinsurance or deductible portions. This means that you are no longer liable to pay the coinsurance or deductible. Aviva Myshield Plus plan is an example of such a plan. One chooses to cover either the deductible or coinsurance portion.
Well, a simple way to understand it is to treat the coinsurance and deductible as money that you will have to pay for your medical bills even though you have insurance coverage. The reasons coinsurance and deductible exists is probably to keep the cost of insurance low and affordable while preventing individuals from exploiting the medical system and the insurance coverage they enjoy.
A deductible is similar to what is the known add excess in motor insurance. This basically means the amount of money you will have to pay FIRST before the insurance company allows for any claims. For example, if the deductible is stated as $2000, and your hospital bill is also $2000, you don't get to claim any money since you will be expected to foot the first $2000 for any medical bills.
I guess the deductible tries to prevent petty claims since one is expected to co-pay for your hospitalisation bills, you are less likely to get yourself warded or hospitalised just for a minor ailment. Knowing that you have to foot the first few thousand dollars of the hospital bill, you are less likely to abuse the system and get yourself warded everytime you get a cold.
Next. Coinsurance. This is usually stated in percentage terms. Common to see 10% or 20% stated. What this means is that after paying the deductible, there is still a coinsurance payment where you are expected to pay a percentage of the hospital bills while the insurer pays the rest. So let's say the bills add up to $10000 with a $2000 deductible and 10% coinsurance, a person will have to pay the first $2000 plus 10% of the remaining $8000 bill. This means he/she pays $2800 out of their pocket while the insurer pays the remaining $7200 of the bill.
Some medical insurance plans actually allows you to buy riders to cover the coinsurance or deductible portions. This means that you are no longer liable to pay the coinsurance or deductible. Aviva Myshield Plus plan is an example of such a plan. One chooses to cover either the deductible or coinsurance portion.
I can see that you are an expert at your field! I am launching a website soon, and your information will be very useful for me.. Thanks for all your help and wishing you all the success in your business. auto insurance companies
ReplyDelete