Premiums = Cost of having insurance
The amount you have to pay before the insurance kicks in
The % of costs you pay after meeting your deductible
A fixed amount for a covered service
How does it work? See below
Hospital Bills: $100,000
Negotiated Rate: $70,000 Rate that Providers have with the Insurance Company
Co-insurance: 20% (67,000 x 20%) = $13,400
Jane’s insurance says her Out of Pocket Maximum is $5,000.
So Jane would pay $3,000 in deductible and $2,000 in co-insurance and now for the rest of the year, Jane’s medical coverage is 100% covered.
Insurance company pays: $65,000