How much you pay before the plan pays

Does the coinsurance on health insurance apply to the total medical charge or the discounted charge after the health plan’s discount?  For example, my insurance company says I owe 20% coinsurance on laboratory visits. The lab charged $200, and the insurance company disallowed $175, which means we have $25 left over. The insurance company says I owe the entire remainder. But isn’t the coinsurance applied to the remainder (hence, I would owe about $5) instead of the total laboratory charge?

Adding Up

Dear Adding Up,

Your 20% share is 20% of the charges that the plan “allows”.  This is the fee that the insurer has negotiated with the lab, in your case.  Here is the trick — you have to pay your deductible first.  So, you have a $250 deductible that you pay out of your own pocket first; then, when more bills come in, you pay 20% of those (again, 20% of the fee the insurer has negotiated).

The insurer is correct that you owe the $25, if you have not already spent $250. On the bright side, you are now $25 closer to meeting your $250 share.


Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.