When purchasing health insurance, regardless of the type of policy, it's common for people to think that by making the corresponding payments for their insurance, they won't have to contribute more money in the event of an unforeseen event. However, this isn't the case.
In health insurance, coinsurance is a key term you need to understand to effectively manage your healthcare costs. Like copayments, deductibles, and out-of-pocket maximums, coinsurance is one of the financial responsibilities you may face when using your health insurance.
What is coinsurance?
Coinsurance is the part of your medical bill that you pay yourself. If your plan has 80% coverage, the insurance pays 80% and you pay 20%. You only start paying coinsurance after reaching your deductible.
In other words, the cost is shared between you and your insurance plan. The plan covers most of the costs, but you pay a portion as well. Co-insurance is one of the key components of many health insurance plans and functions as a percentage of the total cost of the covered service.
Why is coinsurance paid?
The goal is to make the insured party responsible for paying for necessary services in the event of an accident or illness. It's a way to involve the client so that, together with the insurer, they can look after their interests by ensuring that costs don't rise or exceed the total amount of their contracted plan.
How does coinsurance work?
Coinsurance is applied by percentage. For example, it is common to have 80% coinsurance, which means your plan covers 80% of the covered amount of an eligible expense, and you pay the remaining 20% yourself.
Coinsurance only applies after you've reached your deductible. This means that before you reach your deductible, you're responsible for the full cost of medical services until you reach that amount.
Why you should know about coinsurance
Knowing your coinsurance and how it applies is crucial to planning your medical expenses and avoiding financial surprises. Here are some key reasons to understand your coinsurance:
- You can calculate in advance how much you might need to pay for expensive medical services.
- When comparing different plans, the coinsurance percentage can be a determining factor in choosing the most appropriate plan.
- Understanding how coinsurance interacts with your deductible and out-of-pocket maximum can help you optimize your use of health insurance and minimize costs.
Reduce insurance costs with M-KOPA
Understanding coinsurance isn’t just about avoiding surprises; it’s about taking control of your healthcare costs and choosing the right plan for your family. At M-KOPA, about 80% of our customers end up claiming up to KSH 1,000 after every hospital visit.
With us, you don’t need to worry about complicated processes. We're here to help you navigate the enrollment process and deliver the best health plan for you and your family, thanks to our partnership with Turaco Insurance.
Fill out our contact form to receive a step-by-step guide on how to enjoy our health cover.
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