Final answer:
The percentage of costs a patient shares with the health plan is known as co-insurance, which requires the patient to pay a specific percentage of total healthcare costs after meeting their deductible. For example, a 20% co-insurance means the patient pays 20% of the costs while the insurance covers the remainder. This mechanism helps distribute the financial risk between patients and health plans.
Explanation:
Understanding Cost-Sharing in Health Insurance
The percentage of costs a patient shares with the health plan is called co-insurance. Co-insurance is a common term used in health insurance plans that requires the insured individual to pay a specific percentage of the total health care costs after the deductible has been met. For instance, if a health insurance plan has a 20% co-insurance requirement, the patient will pay 20% of the costs for a medical service, while the insurance provider will cover the remaining 80%.
How it Works
After a patient meets their deductible—an amount they must pay out-of-pocket before the insurance comes into play—co-insurance kicks in. Here are a few examples of how co-insurance works:
- Example 1: If a patient has a $1000 medical bill and has already paid their deductible, with a 20% co-insurance, they would pay $200 while the insurance pays $800.
- Example 2: If the same patient had a bill of $500 and they have met their deductible, they would pay $100 and the insurance would cover $400.
Co-insurance often applies to acute care, catastrophic or prolonged conditions, and both inpatient and outpatient services, allowing patients to share the risk of high medical costs with their insurance providers.
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