We often talk about how much the difference between co-pays and co-insurance can be, but today we thought we’d show you the difference with this story from The Huffington Post on the the costs of specialty drugs:
When Kathi Ryness’s multiple sclerosis worsened in 2000, she began taking Avonex, a drug that helps slow the progression of the disease and reduces the number of relapses. At the time, her health plan covered the drug in full.
But in 2009, she and her husband, Gary, were forced to switch plans. Under their new coverage, the Alamo, Calif., couple owed $660 every four weeks for the weekly Avonex injections, 30 percent of the $2,200 cost. Within a year, the cost went up again, leaving Kathi, who is now 62, and Gary, 66, on the hook for $800 every four weeks.
The coinsurance was killing them. “It was a choice between that and eating,” Gary Ryness says.
Working with an insurance consultant, they switched from a preferred provider organization to a health maintenance organization that didn’t have coinsurance charges for self-injectable drugs such as Avonex. Now, they pay nothing for the drug.
“Everybody has different ways of classifying these drugs,” Gary says.
So here’s today’s health insurance basics reminder: Most people use the terms “copay” and “co-insurance” interchangeably, but they are not the same!
A copay is a flat fee that a person pays for healthcare services, in addition to what the insurance covers, usually $10 or $20. For example, HMOs often require a $10 “co-payment” for each doctor’s visit, regardless of the type or level of services provided during the visit.
Co-insurance refers to the amount that a person is responsible to pay for healthcare services, after a deductible has been paid. Co-insurance is often specified by a percentage. For example, if a policy has a 20% co-insurance, and you undergo a procedure which costs $100, the policy will cover $80, and you will be responsible for $20.
As you can see from Kathy Ryness’ situation, the move to a health insurance plan with a co-insurance on Avonex made a huge difference. The couple went from paying little if anything for the Avonex to a whopping co-insurance bill overnight.
Have you been hit with huge co-insurance bills? Tell us about it in our discussion forum!
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