Health Insurance 101: How Insurance Works In 90 Seconds | BCBSND

So a lot of times we get questions on how insurance works. So I'm going to give you an example and for this example we're going to say that your plan has a $10 copay, a $500 deductible, and 80-20 coinsurance. And unfortunately you cut yourself, you need to get stitches and go to the hospital. When you get to the hospital you give the person behind the desk your ID card and you pay your $10 copay up front. They take you back, get you fixed up. A short time later you receive your hospital bill along with an explanations of benefits from your insurance company. Now in your explanations of benefits you can see that the total charge came to $1,000 and the hospital has subtracted your $10 copay. Then you are responsible for your $500 deductible and since that's been met for the calendar year your insurance will apply 80% payment and you're responsible for the other 20%. So your total expenses for this hospital visit include your $10 copay, your $500 calendar year deductible, and $98 in coinsurance leaving you with a grand total of $608. Now let's say down the road in the same year you need to receive similar services. Since you've met your $500 deductible you're only going to be responsible for your $10 copay and your 80-20 coinsurance.