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Understanding cost sharing

Manage your healthcare finances

We are committed to helping you understand and manage the costs associated with your healthcare. Cost sharing is a fundamental aspect of health plans, where both you and your health plan share the expenses for covered services, medications and medical supplies. Here’s a guide to help you navigate cost sharing and make informed decisions about your healthcare finances.

Key highlights:

  • Copays:

    • Definition: A copay is a set amount you pay each time you receive certain covered healthcare services, medications or medical supplies.
    • Example: Ben pays a $35 copay for a doctor visit and a $20 copay for generic drugs.

  • Deductibles:

    • Definition: Deductibles are the amount you owe for certain covered healthcare services before your health plan begins to pay for them.
    • Example: Ben’s plan has a $2,000 per-person deductible, which he must meet before his health plan starts covering costs.

  • Coinsurance:

    • Definition: Coinsurance is the percentage of allowed amounts for certain covered services that you pay after your deductible has been met.
    • Example: After meeting his deductible, Ben pays 20% coinsurance for his shoulder surgery.

  • Out-of-pocket limit:

    • Definition: The out-of-pocket limit is the most you’ll pay for covered services during a benefit period, usually a calendar year, before your plan begins to pay 100% of the allowed amount.
    • Example: Ben’s plan has a $4,500 per-person out-of-pocket limit. Once he reaches this limit, his health plan covers all remaining costs for the year.

How cost sharing works:

  1. Copays:

    • You pay a copay each time you receive certain covered services. Copays do not count toward your deductible but do count toward your out-of-pocket limit.

  2. Deductibles:

    • You must pay the full deductible amount before your health plan starts covering costs. Deductibles can be per-person or family amounts.

  3. Coinsurance:

    • After meeting your deductible, you pay a percentage of the allowed amounts for covered services. Your health plan covers the remaining percentage.

  4. Out-of-pocket limit:

    • Once you reach your out-of-pocket limit, your health plan pays 100% of the allowed amount for covered services for the rest of the benefit period.

Example scenario:

  • Ben’s health plan:

    • Copays: $35 doctor visit, $20 generic drug, $35 physical therapy
    • Deductible: $2,000 per-person, $4,000 family
    • Coinsurance: 20%
    • Out-of-pocket limit: $4,500 per-person, $9,000 family

  • Ben’s costs:

    • Doctor visit: $35 copay
    • Generic drug: $20 copay
    • MRI: $1,000 deductible
    • Shoulder surgery: $1,000 deductible + $2,200 coinsurance
    • Physical therapy: $35 copay per visit

Important considerations:

  • Cost sharing reset: Your cost-sharing responsibilities reset at the beginning of each benefit period, usually January 1.
  • Family deductibles: A family can meet its full deductible without each person meeting their own amount. Once the family collectively meets the deductible, all members are considered to have met it.