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Agent Straight-Talk

 


 

 

Dean George is the Marketing Specialist and Content Creator for Dental Insurance
Store and its social media channels. He is a regular contributor to Agent Straight Talk, the
only consumer blog explaining the ins, outs and in-betweens of dental insurance and
discount dental plans. READ MORE

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Are Copays and Coinsurance Confounding and Confusing?

Jan 21, 2014

By Dean George

Felicia and I have a bet.She says insurance terminology was devised by a group of spelling bee contestants cleaning up an accidental interstate spill of Scrabble tiles and Boggle cubes.

I disagree. I'd bet those complex insurance terms that bemuse and confuse originated after a massive earthquake at the printing facilities of a Chinese publisher of multilingual crossword puzzles and thesauruses.


Photo source: beidaenglish.com

Or we could both be wrong and maybe insurance lingo is the love-child of the union of Merriam-Webster in the 19th century. Whatever its origins, our job with Agent Straight-Talk this month is to untangle the knot of insurance nomenclature and see if we can improve on everyone’s understanding.

Earlier this month I wrote about deductibles, and last week Felicia walked us through effective dates and waiting periods.  This week we’ll explore the twin titans of confounding confusion concerning dental insurance and discount dental plans: copays and coinsurance.

Copays and coninsurance are both methods of member cost sharing. Individual dental plans like Dental Health Maintenance Organizations (DHMO) and some indemnity plans require copays, while Preferred Provider Organizations (PPO) require coinsurance.

So what’s the difference?

Copays are a fixed amount or flat-fee paid for a dental procedure and/or visit. For example, let’s say that you have a HMO plan and have been told by your dentist that you need a small single-layer filling. You agree to the dentist’s recommendation of a resin based composite because you don’t want people humming the Long Ranger theme song and thinking, “Hi-yo, Silver!”

The total bill including the office visit may be $200, but your plan benefits call for you to pay just $15 for the office visit and $45 for the resin filling. Because you don’t have a deductible with your HMO plan, you walk out whistling with a refurbished smile and a song for a total out-of-pocket expense of $60.

Coinsurance is a set percentage of a dentist’s charge for services rendered as opposed to a fixed dollar amount or flat-fee. Explained another way, coinsurance is a cost-sharing platform between you and your dental plan and the amount of coinsurance required usually varies by the type of service received.

 If you have a PPO plan but have not paid your annual deductible, here’s the breakdown for the same treatment and costs described above:

Annual deductible: $50.
Office visit – included in the cost of the treatment

That leaves a remaining balance of $150 split between you and your PPO provider. Depending on the plan, your provider may pay 80% of the remaining balance ($120), or 50% ($75), which leaves you covering the remaining 20% ($30) or 50% ($75).

So let me take off my shoes and you can count with me: If your PPO plans pays 80% of a $200 bill and after paying your $50 annual deductible, you pay another $30 for a total out-of-pocket of $80 and the PPO plan pays the remaining $120.

Of course, if you had already paid your annual deductible your total out-of-pocket costs would have been just $30 – or $75 if the plan paid 50%.

As we’ve already said, indemnity plans that allow you to go to any dentist may require copays or coinsurance. On the other hand, discount dental plans don’t involve either copays or coinsurance, but rather negotiated discounts for dental services.

As Felicia described last week, discount dental plans work like coupons towards dental services.  Most discount plans offer a 25% reduction in the usual and customary dental fees, whether the service received is basic like a filling or a simple extraction or more involved like getting a root canal or crown.  Oftentimes those discounts even apply toward orthodontia!

Now that you know the difference between copays and coinsurance, we encourage you to visit Dental Insurance Store soon and explore the different plans available in your area. Thanks for reading Agent Straight-Talk, and be sure to visit us again next week when Felicia will shine more light on insurance lingo and linguistics.


Copyright 2014, Bloom Insurance Agency, LLC©


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