Co-insurance is the percentage of a medical bill that the health plan will pay after you have met the deductible. Most plans pay about 80%. A few plans pay as high as 100% and others pay as low as 50% of covered charges. With Indemnity plans the co-insurance percentage does not usually change regardless of the medical providers you choose. With Preferred Provider Organization plans (PPO), the co-insurance percentage is usually quite good if you use the PPO providers, but it will drop considerably if you use non-PPO providers.

If an insured has to pay 20% co-insurance of a $100 claim that is usually not a large financial hardship. If, however, you run up a $500,000 medical claim, you might feel uncomfortable having to pay 20% of so large a figure. That is why insurance plans change their co-insurance percentages to 100% after an insured has incurred a certain level of paid expenses (in most cases). This provision is called the "Out of Pocket Maximum".

This document was last modified on July 27, 1999 by LMLeber

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