What Does 50% Coinsurance After Deductible Mean for Your Health Plan?

Understanding how coinsurance works with your health insurance deductible is key to estimating your potential out-of-pocket costs. Coinsurance is the percentage you pay for covered medical services after reaching your deductible. So what does 50% coinsurance after deductible mean for your specific health plan?

Coinsurance Basics

First, let’s review some key terms:

• Coinsurance – The percentage you pay for healthcare costs after meeting your deductible, up to your out-of-pocket maximum. With 20% coinsurance, for example, you pay 20% while your insurer covers 80%.

• Deductible – The amount you pay out-of-pocket before your insurance starts contributing. Common individual deductibles are $1,000-$8,000.

• Out-of-pocket max – The most you’ll pay in a year before your insurer covers 100% of costs. The 2023 limit is $9,100 individual/$18,200 family.

Coinsurance kicks in after you hit your deductible. You continue paying coinsurance until reaching your out-of-pocket max, at which point your insurer pays 100% of your covered care.

The coinsurance percentage varies by health plan. Common options are 10%, 20%, 30% and 40%. Higher coinsurance means greater cost-sharing with your insurance company.

What Does 50% Coinsurance Mean?

If your health plan has 50% coinsurance after the deductible, here is what to expect:

• You pay 100% of medical costs until meeting your annual deductible.

• After reaching your deductible, you pay 50% of additional covered expenses. Your insurer pays the other 50%.

• You continue to pay 50% coinsurance until you hit your out-of-pocket maximum, then your insurer covers 100%.

For example: Your plan has a $3,000 deductible and 50% coinsurance. If you have a $10,000 hospital bill, you would pay:

• $3,000 deductible
• 50% of remaining $7,000 → $3,500 coinsurance
• Total $6,500 out-of-pocket

Your insurer would cover the other $3,500 after your deductible and coinsurance.

Compared to lower coinsurance levels like 20%, plans with 50% coinsurance after deductible come with much greater cost-sharing. However, you reach your out-of-pocket maximum faster.

What Health Plans Have 50% Coinsurance?

You typically find 50% coinsurance on high-deductible, lower-premium plans like:

• Bronze level marketplace plans
• Some employer-sponsored high deductible health plans (HDHPs)
• Short-term insurance plans
• Catastrophic coverage plans

For marketplace Bronze plans in 2023, the average individual deductible is $7,500 with 50% coinsurance after that.

Bronze and other high-deductible plans keep premiums affordable by shifting more upfront costs to policyholders. The tradeoff is you pay more when receiving medical services.

Employer HDHPs with health savings accounts (HSAs) also tend to have high deductibles and 50% or more coinsurance. But your employer may fund your HSA to help offset costs.

Pros and Cons of 50% Coinsurance

There are advantages and disadvantages to plans with 50% coinsurance after the deductible:

Pros

• Lower monthly premiums
• Reach out-of-pocket max faster
• HSAs offer tax-advantaged savings (if eligible)
• No copays or coinsurance after hitting max

Cons

• Very high medical costs with 50% coinsurance
• Must budget for high out-of-pocket expenses
• Not eligible for HSAs (marketplace plans)
• No initial coverage until deductible met

Fifty percent coinsurance plans work best if you rarely need medical services or have significant health savings. But unexpected illnesses or accidents can lead to financial hardship.

Estimating Your Total Costs

Choosing a plan with 50% coinsurance after deductible can be financially risky. It’s essential to estimate your potential out-of-pocket costs for the year based on your expected medical utilization.

Follow these steps:

1. Project your total medical expenses for the year. Include costs for:

   • Doctor visits
   • Lab tests
   • Imaging
   • Surgeries
   • Hospital stays
   • Prescriptions

2. Add up expenses until reaching your deductible.

3. Take 50% of the remaining projected expenses. This is your coinsurance.

4. Total the deductible amount and coinsurance estimate.

5. Compare to your out-of-pocket maximum.

This gives your estimated yearly costs. Also factor in monthly premiums.

Other Questions about Coinsurance

Here are a few other common questions about coinsurance:

What does 20% coinsurance mean?

With 20% coinsurance, you pay 20% of covered medical costs after meeting your deductible. The other 80% is covered by your insurer. Twenty percent coinsurance is more common than 50%.

What does 100% coinsurance mean?

One hundred percent coinsurance means you pay the full negotiated cost for a healthcare service after your deductible. Your insurer covers nothing. This is rare but may apply to certain out-of-network providers.

What does 0% coinsurance mean?

Zero percent coinsurance means your insurer pays 100% of costs after you meet your deductible. You pay $0 coinsurance. This generous coverage is uncommon.

Does coinsurance count toward deductible?

No, coinsurance payments come after your deductible is met. Deductible expenses count toward your deductible. Coinsurance applies to costs your insurer covers that remain after the deductible.

The Bottom Line

Fifty percent coinsurance after deductible increases your healthcare costs compared to lower coinsurance levels like 20 or 30 percent. But it also allows you to reach your out-of-pocket maximum faster. Carefully weigh the pros and cons when choosing a high coinsurance plan. And be sure to accurately project your total costs including premiums, deductible and coinsurance. This helps ensure adequate savings and budgeting.