Understanding Your Prescription Insurance: What is Copays vs. Coinsurance?
Every prescription plan has a portion that you pay and a portion that they pay. Knowing the difference between a copay and a coinsurance is important. It makes the difference between whether you will have a predictable drug cost or not. Also, most prescription plans break their drug costs into tiers. It is a good idea to get an idea as to what those tiers are for your medications, so you can plan accordingly.
Getting the most out of your prescription plan is all about being prepared and well informed.
A copay on a prescription plan is usually defined as a flat fee. When they break down the drug costs into tiers you will pay a certain dollar amount for each tier. Consult the video to the right for great information on the different tiers in some easy to understand language.
With a flat fee, like a copay, you know what to expect when you are getting a prescription. You can pretty much tell how much you will be paying when you know what tier each drug falls under. As usually, the best way to cut the cost of your drugs is to shoot for the lowest tier on the plan.
Your prescription benefits manager can help you with what your prescription plan tiers are and what each one will cost.
A coinsurance on a prescription plan is usually defined as paying a percentage of the retail cost of the drug. Because drug prices do fluctuate, just like gas prices these days, you are looking at an unpredictable cost when you go to get your prescriptions. Keep this in mind when you are talking to your doctor as well.
Coinsurance plans are likely to have a tier system as well, which means that you will want to shoot for the lowest tier on the plan, the generics, to get the best deal on your prescriptions.
The best way to have a more predictable cost experience when it comes to a coinsurance plan is to be prepared. You can go to your prescription benefit manager for help. The customer service representative can quote your prices over the phone, or if they have a website you can usually go there for drug costs.
You can also speak to your representative about alternative drugs that are more cost effective or how to better utilize your prescription plan.
Combining Copay with Coinsurance
Some plans will combine the two types of drug cost into the same tier. Usually that means that you pay a percentage of the retail cost OR a minimum of a flat fee. Whichever one is higher is the one you are going to pay for any given drug.
With these, you want to keep in mind that you always pay your portion first and your prescription plan will pick up the rest. That means that if the retail drug cost is lower than your minimum flat fee, you will pay the cost of the drug and your prescription plan will pay nothing as there is nothing left to pay.
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