Understanding Visitors Insurance Deductible, Copay, and Coinsurance
As you navigate your out-of-pocket costs for your visitors insurance plan, you’ll likely come across some terms that may or may not be familiar to you. Similar to a domestic healthcare plan, visitors insurance out-of-pocket costs include deductibles, copays, and coinsurance. In order to understand just how much you will be paying out-of-pocket for eligible medical expenses covered by your visitors insurance plan and why, it would be helpful to become familiar with these terms.
These terms will also be present on your Explanation of Benefits, or EOB, which will be given to you after a claim you filed with your visitors insurance plan is processed. Knowing what these terms mean will allow you to be better informed when it comes to understanding what portion of your medical expenses are your responsibility versus the insurance company’s covered costs.
What are Out-of-Pocket Expenses?
Out-of-pocket expenses are things like deductibles, copay, or coinsurance which are costs that the policyholder is responsible for. The total amount of out-of-pocket expenses that the policyholder will be required to pay will vary from plan to plan, depending on whether it is a comprehensive or limited plan, the policy maximum, and more.
What is a Deductible?
A deductible is the amount that the policyholder is responsible for covering before the insurance coverage starts covering eligible expenses. Eligible medical expenses will first count towards your deductible until the deductible is met, then your insurance coverage will cover remaining eligible costs (up to the policy maximum).
The amount of your deductible is customizable in visitors insurance, meaning you can select a deductible that best suits your needs. The deductible amount will ultimately affect the cost of your insurance policy. There are also different types of deductibles including one-time deductibles, per-incident deductibles, and zero deductibles.
A one-time deductible is used in comprehensive visitors insurance plans and only requires you to meet the deductible one time for the entire policy period of your plan. Once the deductible is met, the insurance provider will start to cover eligible expenses.
When you purchase your visitors insurance plan, you will choose your deductible. The deductible amount will affect the premium cost of your insurance. Typically, a visitors insurance plan will pay a percentage of the policy maximum after the deductible is satisfied, depending on whether you seek care within or outside the PPO network. In general, most comprehensive plans cover 100% of costs in network after the deductible is satisfied for eligible medical expenses. Any sum that exceeds the maximum coverage under the policy is the insured person’s obligation.
A per-incident deductible model is often found in limited visitors insurance plans and require you to meet the deductible for each separate illness or injury. These deductibles are calculated incidentally.
For plans with limited coverage, the deductible is subtracted from the total amount that the doctor bills the insurance company.
For example, the insurance would only cover a maximum of $3,000 if the plan pays $3,000 (fixed benefit amount) for a covered surgery and the entire cost is $15,000. Should you decide on a $100 deductible, this is the amount that would be your responsibility to cover before the plan’s benefits kick in for eligible expenses.
A zero deductible means that you won’t be required to pay any deductible amount and eligible costs will be covered immediately. If you selected $0 deductible, then you do not need to pay a deductible before insurance starts paying out benefits. With most comprehensive plans, copay is waived for urgent care/walk-in clinics (this condition may vary, please refer to specific plan details).
Q: Does the deductible need to be met more than once?
A: This depends on the type of visitors insurance plan you choose. For comprehensive visitors insurance plans, the deductible only needs to be met once within a policy period. For limited visitors insurance plans, the deductible would need to be met for each separate illness or injury.
Q: If I renew or extend my plan, would my deductible need to be met again?
A: If you renew or extend your plan, your deductible for a comprehensive visitors insurance plan would not need to be met again if you have already met the deductible. If you haven’t yet met the deductible, the amount left will be carried over to the extension period. However, you would need to meet your deductible again if you have a limited visitors insurance plan for any separate new illnesses or injuries you seek treatment for.
Q: How would I know that I met my deductible if my provider is dealing with the insurance company directly for payment?
A: Information regarding your deductible amount and out-of-pocket responsibility will be detailed in your Explanation of Benefits, or EOB, which will be provided to you after you file a claim and it is processed by the insurance company.
For specific information regarding your policy’s deductible, please review your policy documents.
What is Coinsurance?
Coinsurance is the percentage of a total covered health care service or treatment that is your responsibility as the policyholder to pay out-of-pocket after you’ve paid and met your deductible.
For example, if your prescriptions cost $100 and your coinsurance is 20% in an 80%-20% plan, after you’ve met your deductible, you’ll pay 20% of the $100 which is $20 and the insurance will cover 80% (of eligible expenses).
What is Copay or Copayment?
A copay, or copayment, is a one-time payment that you make in order to access certain medical services, such as prescription medication or a visit to the doctor. Your health insurance plan and the services you receive will determine your copay. This amount is predetermined and is required to be paid up front in order to receive a covered service.
A copayment is separate from the deductible - the deductible amount needs to be met separately and copay does not count towards your deductible amount.
For example, you may be required to pay a $30 copay for an urgent care visit. The copay cost may range anywhere from $15 to $30 depending on your plan.
Plan for Out-of-Pocket Expenses
Now that you understand what a deductible, copay, and coinsurance are when it comes to visitors insurance, you can better plan and prepare for the out-of-pocket expenses that you’ll be required to pay in the event that you need to seek medical care under a visitors insurance policy. To truly understand these costs, be sure to review your policy’s description of benefits in full.