Question and Answer

What is the difference between a deductible, coinsurance, and a copayment?

Question: 
What is the difference between a deductible, coinsurance, and a copayment?

Answer:
A deductible is the initial amount of money you or your supplemental insurance pays for health care expenses before your insurer starts coverage. For example, if you are in the hospital, you are responsible for the first $1,216 in hospital bills (2014 Part A deductible) before Medicare starts paying for your hospital care.

Coinsurance is the percentage of the cost of care you or your supplemental insurance is required to pay after your health plan pays. With Original Medicare, the coinsurance is usually 20 percent of the Medicare-approved amount. So if your care cost $100, your coinsurance would be $20.

A copayment is a fixed amount you are required to pay for each medical service you receive, such as a doctor visit, so no matter what the cost of the service is, you pay the same amount. Usually, Medicare Advantage plans like HMOs or PPOs have copayments.

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