What is coinsurance?
Coinsurance is a percentage of a healthcare expense that you must pay while your insurance plan covers the rest.
Think of it as splitting the cost with your insurance plan: They cover most of it, but you pay some of it out-of-pocket, too.
How does coinsurance work?
Coinsurance is usually done by percentage. For instance, it’s common to have “80 percent coinsurance,” meaning your plan will cover 80 percent of the covered amount of an eligible expense, and you pay the remaining 20 percent out-of-pocket.
This only happens after you’ve “satisfied your deductible,” assuming your plan has one. A deductible is a set amount you must pay out of pocket before your plan coverage kicks in.
What other limits can apply to what is covered?
Your plan may limit the eligible expenses to a certain amount per treatment. This may be a fixed amount, for example $60 per massage, or it may be based on what is viewed as the reasonable and customary charge for the treatment.
Some professional associations, such as provincial dental associations, publish a fee guide. This establishes the amount the association recommends dentists charge for particular services. While your dentist can charge a different and higher amount, many plans limit the eligible expense to what is set out in the fee guide.
These limits will be applied to the claim before the coinsurance percentage is applied.
How does all this work together?
Example 1 – Rashid’s plan may have a $25 deductible for a podiatrist visit. If they go to the podiatrist and their appointment costs $100, they have to cover the first $25 and then their plan coverage, including any coinsurance, applies to the remaining $75.
Example 2 – Joe has a personal healthcare plan with 80 percent coinsurance for dental coverage. He goes to the dentist and claims $100 in eligible expenses. He’s already met his deductible. Joe’s plan will cover $80 of this cost. He must pay $20 out-of-pocket.
Example 3 – Marie has a plan that has 90% coinsurance. She went to the physio and the visit cost her $200. However, the reasonable and customary charge for that visit in her province is only $150. This is Marie’s first claim this year and so she has to satisfy her deductible, which is $25. Marie’s eligible expenses are therefore $125 and her plan will cover 90%, or $112.50.