What is a coinsurance cap?

"A co-insurance cap is usually called "Stop-Loss." This is the point the member's responsibility to pay any further charges reach a fixed figure and the insurance company will then pay 100% for the balance of that calendar year or policy period. When the member reaches level, only the services that would normally apply to the deductible and/or co-insurance, will be paid by the insurance company at 100% for the balance of that calendar year. The member will still have to pay their normal office visit co-payments to the physician and their prescription co-payments and if any prescription deductible," answers Cindy J. Holtzman, Director of Operations at Medical Billing Advocates of America (MBAA). A coinsurance cap, a stop loss, and a maximum out of pocket expense limit are all the same thing. A coinsurance cap is to help control out of pocket expenses for the person, or family, whom the medical insurance policy applies to. When you have to pay a percentage of your every medical bill, should you have a rough year with your health you easily would be facing financial hardship as well. A coinsurance cap is a yearly benefit within a coinsurance medical insurance plan. Once that cap is reached it is for the remainder of that year that the insurance covers your medical expenses, but as soon as the year begins you are right back at having to start paying on your deductible all over again. Stop-Loss is to protect you financially in the case of a disastrous health year. This is a clause in your medical insurance policy that actually helps you.

"To get to the "Stop-Loss" point, the co-insurance percentages paid by the member accumulate as services incur and calculated once they reach the specified "total" out of pocket amount, the Stop-Loss, then insurance pays 100%. For example: If the in-network plan pays 80%, up to a $5,000 stop loss, the member's out of pocket is $1,000 (in 20% increments) while the insurer pays $4,000 (80%) and now the member is at 100% and has met the "Stop-Loss" in charges accumulated," Cindy J. Holtzman demonstrates. It's advisable to always know the amount of your coinsurance cap. When considering a medical insurance policy, if you add this number to the amount of your deductible you can get a fair understanding of your potential out of pocket costs. That doesn't include co-payments but you could make an educated guess on how many of those co-payments you might spend in a year and then add that to your calculation. Everyone's number one concern is how much will health insurance cost, whether they use it a whole lot or little at all. It's good budget planning and a wise financial move to be aware of the expected expenditures within your medical insurance policy.

Your policy may also have a total limit of coverage. This means that even after you meet your coinsurance cap, that you might meet the insurance policy cap. This is generally a very large amount of money and few people should be concerned about surpassing it unless you develop an ongoing illness that requires frequent and expensive treatment. You may want to check if your policy has such a limit, but it most cases it's of little concern whether or not it does.