Profile image
Story Views

Last Hour:
Last 24 Hours:

The Stupid: It Burns

Tuesday, March 26, 2013 8:28
% of readers think this story is Fact. Add your two cents.
So this arrived in email:

Higher coinsurance rates correspond to higher annual limits on medical out-of-pocket costs

Okay, I’ll bite; after all, most non-HDHP (hight deductible health plans, like HSA’s) have some cost-sharing (aka co-insurance), and 80/20 is pretty standard.

But what, exactly, does 80/20 mean?

Well, you won’t learn the correct answer from the rocket surgeons at HealthPocket:

A new analysis of coinsurance rates from HealthPocket, Inc., shows that the average coinsurance rate nationally for individual and family health plans is 20 percent, meaning that people with coinsurance are paying one-fifth of the costs on average for certain more expensive services such as hospitalization, child birth, emergency care, and others.”

First, I would question their use of the term “average,” which implies that lots of folks have plans with 70/30 or 90/10 (or even 60/40) levels. They most likely mean “typical.” But that’s far from their most egregious error. Look again at that sentence, and especially this:

people with coinsurance are paying one-fifth of the costs

Um, no, HP, that’s not how co-insurance works. If you’d simply read your own policy, you’d see that, once the deductible is met, you’re responsible for 20% of the next “x” number of dollars, after which the plan steps up from 80% reimbursement to 100% (of covered expenses, of course). That’s why the next section of your little booklet tells you your “out-of-pocket maximum” for covered expenses. These will be higher if you choose out-of-network providers, of course.

And co-insurance doesn’t just apply to “more expensive services,” can also apply to lower cost items if you’re in that co-insurance “corridor.” All you really had to do was ask your agent to explain it to you before you fired off an email that just makes you look, well, stupid.

Better luck next time.

Original content copyright © InsureBlog


We encourage you to Share our Reports, Analyses, Breaking News and Videos. Simply Click your Favorite Social Media Button and Share.

Report abuse


Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories



Top Global

Top Alternative




Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.