Costs

Policies with low co-insurance percentages for the insured will cost more each month in premiums than policies with higher percentages of co-insurance. The insured will pay the monthly insurance premium as well as out-of-pocket medical expenses.

Common Co-Insurance Percentages

There are many different health insurance policies available with varying levels of co-insurance. The most common levels are 90-10, 80-20, and 70-30. The first number represents the percentage the insurance company will pay, and the second number represents how much the insured will pay. For example, if an insurance policy is 90-10, the insurance company pays 90 percent and the insured 10 percent.

Considerations

When deciding what insurance policy to choose, you must determine how much co-insurance you are comfortable paying in the event you or covered family members need medical care. You must also consider how much you can afford to pay in monthly premiums. The more co-insurance you are willing to pay, the lower your monthly premium. Similarly, if you want to be responsible for less co-insurance, your monthly premium will be higher.

Co-Insurance Versus Co-Payment

Many health insurance policies require co-payments in addition to co-insurance. While most consumers see the two as interchangeable, they are different. Co-insurance is a percentage of the cost of medical expenses the insured individual must pay. By contrast, co-payments are set amounts the insured pays for services and prescriptions.

Out-of-Pocket Limits

Co-insurance enables the insurer to share some of the expense of medical care with the insured. However, there are limits to how much of the burden the insured must shoulder. Out-of-pocket limits for policyholders vary based on the specifics of the policy. The insured should choose out-of-pocket limits based on the amount of money he or she is comfortable paying for medical care each year. Above the out-of-pocket limit, the insurance policy kicks in and covers 100 percent of costs.