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I'm shopping for health insurance. (U.S., federal exchange, I'll be losing COBRA which is a qualifying life event.) One of the plans describes its emergency room costs as:

$100 Copay before deductible/40% Coinsurance after deductible

This makes no sense to me. When coverage is described relative to a deductible, I presume I'm responsible for 100% until I hit the deductible.

Let's say I got a $2000 ER bill.

My presumption:

  • If I haven't yet met the deductible, I'd be responsible for all $2000.

The above description seems to say:

  • If I haven't met my deductible, I'm responsible for a $100 copay.
  • If I have met my deductible (but not my maximum out-of-picket), I'm responsible for 40% * $2000 = $800.

It makes no sense to me that my responsibility would be smaller before I met my deductible than after.

How would this really work?

(Added later) (but turns out to be irrelevant) Here are examples of how a similar plan ("$100 Copay before deductible/30% Coinsurance after deductible") works, using the two standard coverage examples:

  • Amount owed to providers: $7,540
  • Deductibles: $2,000
  • Copayments: $20
  • Coinsurance: $740
  • Limits or exclusions: $150
  • Total paid by patient: $2,910

(I have no idea how a plan with a $100 copay ends up in this example with a $20 copay. $740 is 30% of $2,466.67; I don't see where that number comes from.

  • Amount owed to providers: $5,400
  • Deductibles $2,000
  • Copayments $400
  • Coinsurance $440
  • Limits or exclusions $80
  • Total $2,920

(Similar mysteries apply.)

  • 5
    I think what they mean is that the copay doesn't count towards deductibe – littleadv Sep 14 '15 at 2:42
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Summary: The first ER trip is free (well, cheap). After that, ER trips start costing real money. (The language "before deductible," though accurately transcribed, is misleading.)

I spoke to someone at the relevant insurance company. Yes, this is an unusual case where my responsibility is smaller before meeting the deductible than after ... sort of.

Say I need to go to the ER. Oh, well, sometimes that can't be avoided. The insurance company makes me responsible for a $100 copay for this first trip during my coverage period. Stuff happens; let's hope it doesn't happen again any time soon.

But now say I need to go to the ER a second time during my coverage period, or a third, or a fourth, or a fifth. This is either really bad luck or really bad personal management. Some people use the ER as their primary care provider. This is bad, and discouraged.

So now the insurance company doesn't cover the second, third, etc. ER trips at all until I meet the deductible. Even after meeting the deductible, the insurance company only pays 60% of the cost, leaving the remaining 40% of the cost at my doorstep. This stops once I've hit my my maximum out-of-pocket limit, but by the time I've hit that limit, I've been responsible for quite a lot.

Turns out the phrase "$100 Copay before deductible/40% Coinsurance after deductible" really doesn't make any sense. It would have been more accurate if the insurance company had said, "$100 Copay for first visit/40% Coinsurance after deductible for successive visits." Should I see if they're hiring copy editors?

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What they are saying is that the copay comes first, then the deductible, then coinsurance.

So if your bill was $2000, you had a $100 copay, a $1000 deductible, and 40% coinsurance and you hadn't used any medical care you'd owe:

  1. Before Deductible: $100 copay +
  2. Deductible: $1000 +
  3. After Deductible: 40% of remaining ($2000 - $100 - $1000)*.4 = $360

For a total of $1460.

If you've already met your deductible, then step 2 is $0 so it looks like this:

  1. Before Deductible: $100 copay +
  2. Deductible: $0 because you already met it +
  3. After Deductible: 40% of remaining ($2000 - $100)*.4 = $760

For a total of $860.

Here's a site discussing similar plans:

If your plan has a $100 deductible and 30% co-insurance and you use $1,000 in services, you’ll pay the $100 plus 30% of the remaining $900, up to your out-of-pocket maximum. You may find plans with no co-insurance requirements, some with 20/80 or 50/50 coinsurance, or other combinations.

Source: http://www.moneyunder30.com/health-insurance-deductible-co-pay-out-of-pocket-maximum#HdIkyoh8a66mM8Iu.99

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My experience with US insurance companies and emergency rooms in the last few years has been as follows.

If you use an emergency room, and they feel that it is not justified, the insurance company will want to discourage that type of behavior. So they hit you with a $100, $250, or even a $500 ER copay. Then the charges for the actual procedures conducted at the ER are reimbursed based on what the status is regarding the plan deductible and out-of-pocket numbers.

If you end up getting admitted to the hospital, the insurance company waives the ER copay.

The phrase "40% Coinsurance after deductible' means that you may be responsible for 40% of the approved part of the bill, plus the delta between what they bill and what they cover.

For example:

The bill from the ER is $2000 but if you had gone to your in-network primary care physician, and then received a referral for the X-rays at an in-network provider, then the cost would have been $800.

If you are well below the deductible:

  • $100 ER Co-pay
  • all $2000 unless you can negotiate better deal with the ER.
  • Depending on the network status of the hospital they may cut a deal with the insurer that will lower their rate to the $800 level.
  • In some cases the insurance company may only credit you with the $800 rate against the deductible.

If you have meet the deductible:

  • No ER co-pay
  • You will pay 40% of the $800 (%320)
  • the delta between $2000 and the $800 will depend on the network status of the hospital. The hospital could expect you to cover the delta.
  • depending on the insurance policy they may only credit the $320 towards the out-of-pocket max, even if you end-up paying the delta between $2000 and $800.

If you had gone to the primary care physician you would be responsible for a lower amount of co-insurance/co-pay depending on your status regarding deductible and out-of-pocket maximum. But the max would have been $800.

To fully understand the impact of a ER visit when the insurance company doesn't consider it an emergency, you will have to look through all the documents for an detailed illustration of that specific situation.

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"$100 Copay for first visit/40% Coinsurance after deductible for successive visits."

yes, this clarifies things. They should always describe "costs borne by insured, in successive graduations of care expenditures". It's much more clear if described "first visit you pay $100 copay, then you pay 100% until deductible met, after deductible met you pay 40%",

Your original confusion about "smaller amount" arises because the original impetus was a straight forward "you pay 100% until deductible met, then you pay 40%, BUT they made an exception to allow everyone a few/one doctor visits at a discounted rate (say, to encourage preventive care, or cover routine yearly flu/colds) for which they charge a flat fee ($100 copay).

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