Copays or coinsurance are not the enemy. Here’s the bottom line – if you are receiving Medicare benefits, you either pay a coinsurance or a copay. It is totally up to you which one you choose, but before you do, here is something you should probably know.
What is coinsurance?
A coinsurance is a portion of your medical bill that you are responsible for – the one that you get a bill for in the mail. Coinsurance is calculated as a percentage of your medical bill. For example, if you see your primary care doctor and the office visit is $400 and you have a coinsurance of 20%, you are responsible for paying $80 for that office visit. With Original Medicare (Part A and B), you will continue to pay 20% at every doctor and every visit. You also pay 20% of the cost of any services that you receive. The same goes for your hospital bill. Even a minimal hospital stay will run you a few thousand dollars, which means that 20% of that bill will turn out to be hundreds and thousands of dollars. This coinsurance amount is billed to you and requires payment from you.
Many Medicare beneficiaries may not understand that they must pay a 20% coinsurance when they have Part A and Part B benefits only because they either don’t use their medical and doctor services or they just haven’t noticed the bills. But this is how Medicare works. It covers 80% and you cover 20% unless you have Medicaid or a Medicare Advantage plan.
What are Copays?
A copayment or “copay” is a fixed amount that you pay for your covered medical services after any deductible. Copays differ based on the medical services that you are acquiring like primary care visits, specialist visits, lab work, or prescription drugs.
The most important feature of a copay is that it is usually a small fraction of the cost of your medical service. For example, if your doctor’s visit costs $400, your copay may be only $20, with the plan covering the rest of the cost. Copay puts a limit on your out-of-pocket costs per doctor and per visit.
Differences Between Them
Coinsurance is usually billed to you after you receive the service, although, in some instances, you will have to pay the coinsurance upfront. Copays are paid before you receive a service or see the doctor.
Coinsurance means you may have costs to cover after your visit or service, while a copay means you leave your appointment with all financial obligations met for the services.
Having copays should not scare you, instead, it should give you a sense of security that your financial obligation for the medical service ends after you leave. Copays are also usually a much smaller dollar amount than coinsurance which is a percentage of the full cost of service.
We Can Help!
Here at Senior Healthcare Advisors, we specialize in maximizing Medicare benefits! We are here to guide you in understanding and enrolling in the Medicare benefits that you are entitled to and qualify for. Give us a call today