In short
- Deductible: what you pay first, before the plan starts paying.
- Copay: a flat fee per visit, lab or test.
- Coinsurance: the share of covered costs you split with the carrier after the deductible.
- Out-of-pocket maximum (stop-loss): the most you'd pay in a year. It's the most important number and the one people ask about least.
The four terms, one by one
Deductible
The part of the bill you pay before the carrier starts paying. If your deductible is B/. 1,000 and the bill is B/. 600, you pay it. If the bill is B/. 10,000, you pay the first B/. 1,000 and the rest goes to the plan. Depending on the policy, the deductible applies per year or per event.
Copay
A flat fee you pay each time you use certain services, for example B/. 10 or B/. 15 for a specialist visit or a lab. It's what you notice day to day.
Coinsurance
After the deductible, many policies don't pay 100 %: they share the bill with you. 80/20 coinsurance means the carrier pays 80 % and you pay 20 %.
Out-of-pocket maximum
The cap on what you'd pay in a policy year, deductible and coinsurance combined. Once you reach it, the carrier pays 100 % of covered costs for the rest of the year. So instead of just asking about the deductible, ask: what's the most I'd pay in a bad year?
An example with surgery
Say you have a covered surgery that costs B/. 10,000, on a plan with a B/. 1,000 deductible, 80/20 coinsurance and a B/. 3,000 annual out-of-pocket maximum:
- You pay the deductible: B/. 1,000.
- B/. 9,000 remains; your 20 % is B/. 1,800.
- In total you pay B/. 2,800, below the B/. 3,000 cap.
- The carrier pays B/. 7,200.
Had the bill been B/. 17,000, your share without a cap would be B/. 4,200; with the cap you'd pay only B/. 3,000. That's what the cap is worth.
Work out what you'd pay
Swap in the numbers from your policy or from a plan you're comparing. It's a rough estimate: every policy has its own rules.
How to choose your deductible
- A higher deductible if you have an emergency fund and rarely use your insurance: you pay less each month and stay protected against the big bills.
- A lower deductible if you have young children, a condition that needs frequent checkups, or no savings for emergencies.
- Always compare plans by their total cost in a bad year: 12 premiums plus the out-of-pocket maximum.
Does your policy have an out-of-pocket cap?
Send me your current policy and I'll tell you in five minutes what you'd pay in an emergency, and whether there's something better for the same price.