A tool that estimates the financial responsibility of an individual under a health insurance plan with an 80/20 coinsurance structure. It determines the portion of healthcare costs an insured party will owe after the deductible is met, where the insurance provider covers 80% and the insured covers 20% of the remaining expenses. For example, if medical bills total $1,000 after the deductible is satisfied, an individual pays $200, while the insurer pays $800.
This calculation is essential for budgeting and financial planning concerning healthcare. Understanding potential out-of-pocket costs allows individuals to make informed decisions about medical treatments and procedures. Historically, coinsurance was introduced as a cost-sharing mechanism to encourage responsible healthcare utilization and mitigate potential moral hazard, where individuals over-consume services due to insurance coverage. By using a calculator, an individual can better anticipate and manage their healthcare expenditures.
