Health insurance is a wonderful thing to have, yet many people do not understand the benefits of their policy. This could cause you to miss out on some of the benefits you are entitled to. One of the terms that confuse people the most is health coinsurance.

Some people get confused because coinsurance sounds so much like co-payments. In some ways they are similar because they both are co-owners of the insurance bill, along with the member. Once you know the difference between these two and how they work, you will understand your policy much better.

A co-payment is a set amount you pay when going to the doctor. These usually range from $15 to $45 in most policies. Some policies also set up a co-pay requirement for going to the emergency room. The emergency room trip will cost you a co-pay and coinsurance.

Health coinsurance is the percentage of a bill your insurance company does not pay. If you received a bill for a cat scan that cost $3,000 and the insurance company paid $2,500, then the other $500 would need to be paid by you. That $500 is the coinsurance. Although this sound like it could get expensive, it is not as bad as it seems.

Your coinsurance has a yearly cap on it and once you meet that cap, the insurance company will pay bills 100% for the rest of the year. Coinsurance is also sometimes referred to as your out-of-pocket expenses. Most policies have a $2,000 to $5,000 cap on the out-of-pocket expense, so once you pay up to the set amount, your medicals bills will be taken care of the rest of the year.

It is important to remember there is no cap on the co-pays. You will still continued to pay co-pays when seeing the doctor, or going to the emergency room.

Most people already understand what the deductible is and now that you know the difference between co-pays and coinsurance it will make it easier for you to understand your benefits. Every time you get medical treatment of any kind you will receive an EOB. This is short for explanation of benefits.

Keep your benefit booklet close to where you pay your bills so that you can check each of these when they come in. Insurance companies are human and could make a mistake. Knowing your benefits ahead of time can help you figure out if the bill was processed correctly.

Health insurance protects our family from financial ruin and makes it easy to afford good health care. Now that you understand your policy terminology you can feel secure that you and your family are in good hands.