Your health insurance plan will pay the other 80 percent. If you meet your annual deductible in June, and need an MRI in July, it is covered by coinsurance. If the covered charges for an MRI are $2,000 and your coinsurance is 20 percent, you need to pay $400 ($2,000 x 20%). Your insurance company or health plan pays the other $1,600.

There is no lower price for these plans

Medicaid is a social-welfare program that provides comprehensive government-based. Most insurance, other than health insurance, does not have copays, but has a deductible which the insured must pay first, then the insurance company starts to pay. A copay works like this. Coinsurance is your share of the costs of a health care service. It's usually figured as a percentage of the amount we allow to be charged for services. You start paying coinsurance after you've paid your plan's deductible. How it works: You’ve paid $1,500 in health care expenses and met your deductible. When you go to the doctor, instead of paying all costs, you and your plan share the cost.

Health Savings Account or Copays?

• Copays versus no Copays • Lower Premium versus extra Benefit

To have a health savings account and have its tax benefits, you first have to have health insurance that meets certain criteria, i.e., a qualifying plan. Copays are not allowed in an HSA-qualifying plan because Congress wants to encourage the purchase of lower cost health insurance. Copays increase plan cost. The only exception is that copays for preventive care are allowed.

Key Points:

• The only reason to open an HSA account is to get a tax deduction.

• The tax deduction is for what you deposit, not for what you spend.

• The savings account has nothing to do with the policy except that you need that type of policy to be eligible to open the account.

• The policy is from an insurance company. The account is from a bank or other financial institution.

Most insurance, other than health insurance, does not have copays, but has a deductible which the insured must pay first, then the insurance company starts to pay. A copay works like this. If there are covered expenses, instead of having to pay the entire deductible each year before the insurance starts to pay, a small payment is made by the insured for a particular service, e.g., a physician office visit or prescription, and the insurance pays the rest of the charge.

The copay therefore increases the claims cost to some degree for the health insurance company. Consequently, the insurer must charge a higher premium for coverage that includes that sort of feature. Generally, coverage without copays costs less than coverage with copays.

To encourage everyone to buy lower cost health care coverage, the Congress has made available a special tax break for anyone who buys health insurance which has no copays for medical treatment. There are also some other criteria the plan must meet, e.g., the range of allowable deductibles. (Copays may be allowed for preventive care.) This incentive is called a health savings account (HSA).

If the monthly premium is significantly more, even if the tax break is not available or of no use, is it really worth paying more each month for a plan that has copays? The answer may be different for different situations, e.g., an employer who can afford to provide maximum benefits for employees or individuals buying their own insurance.

The employer may buy a plan that includes copays as an employee benefit, but why would an individual in good health pay more per month to have copays which are rarely used? From the insurer's point of view, outside of a law forcing insurers to issue coverage, why would an insurance company want to sell a plan with copays to an individual in bad health?

HSA-qualifying plans are 'lower priced' merely because they have more out-of-pocket expense than plans with no or low deductibles, and perhaps copays. They are relatively high deductible plans and therefore cost less per month. However, there is an upper limit on how high the deductible and annual out-of-pocket can be. Before the passage of the law authorizing health savings accounts, they may have been called 'catastrophic' health insurance.

If the monthly savings, or other amount of your choosing, are deposited into a health savings account, the amount deposited is tax deductible (up to certain limits). Amounts paid out of the account for medical, dental, vision, and other qualified expenses are never taxed. Note that the tax deduction is for saving, not for spending.

Further information: HSA SetupHSA SummaryHSA RulesHSA BanksHSA Simplified

HSA-qualified Quotes(select 'HSA' under 'Plan Type' in the quote results)

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By Jay Hancock, Kaiser Health News

Karen Taylor had been coughing for weeks when she decided to see a doctor in early April. COVID-19 cases had just exceeded 5,000 in Texas, where she lives.

Cigna, her health insurer, said it would waive out-of-pocket costs for “telehealth” patients seeking coronavirus screening through video conferences. So Taylor, a sales manager, talked with her physician on an internet video call.

The doctor’s office charged her $70. She protested. But “they said, ‘No, it goes toward your deductible and you’ve got to pay the whole $70,’” she said.

Policymakers and insurers across the country say they are eliminating copayments, deductibles and other barriers to telemedicine for patients confined at home who need a doctor for any reason.

“We are encouraging people to use telemedicine,” New York Gov. Andrew Cuomo said last month after ordering insurers to eliminate copays, typically collected at the time of a doctor visit, for telehealth visits.

But in a fragmented health system — which encompasses dozens of insurers, 50 state regulators and thousands of independent doctor practices ― the shift to cost-free telemedicine for patients is going far less smoothly than the speeches and press releases suggest. In some cases, doctors are billing for telephone calls that used to be free.

Patients say doctors and insurers are charging them upfront for video appointments and phone calls, not just copays but sometimes the entire cost of the visit, even if it’s covered by insurance.

Despite what politicians have promised, insurers said they were not able to immediately eliminate telehealth copays for millions of members who carry their cards but receive coverage through self-insured employers. Executives at telehealth organizations say insurers have been slow to update their software and policies.

“A lot of the insurers who said that they’re not going to charge copayments for telemedicine ― they haven’t implemented that,” said George Favvas, CEO of Circle Medical, a San Francisco company that delivers family medicine and other primary care via livestream. “That’s starting to hit us right now.”

One problem is that insurers have waived copays and other telehealth cost sharing for in-network doctors only. Another is that Blue Cross Blue Shield, Aetna, Cigna, UnitedHealthcare and other carriers promoting telehealth have little power to change telemedicine benefits for self-insured employers whose claims they process.

Such plans cover more than 100 million Americans — more than the number of beneficiaries covered by the Medicare program for seniors or by Medicaid for low-income families. All four insurance giants say improved telehealth benefits don’t necessarily apply to such coverage. Nor can governors or state insurance regulators force those plans, which are regulated federally, to upgrade telehealth coverage.

No Deductible No Copay Health Insurance

“Many employer plans are eliminating cost sharing” now that federal regulators have eased the rules for certain kinds of plans to improve telehealth benefits, said Brian Marcotte, CEO of the Business Group on Health, a coalition of very large, mostly self-insured employers.

For many doctors, business and billings have plunged because of the coronavirus shutdown. New rules notwithstanding, many practices may be eager to collect telehealth revenue immediately from patients rather than wait for insurance companies to pay, said Sabrina Corlette, a research professor and co-director of the Center on Health Insurance Reforms at Georgetown University.

“A lot of providers may not have agreements in place with the plans that they work with to deliver services via telemedicine,” she said. “So these providers are protecting themselves upfront by either asking for full payment or by getting the copayment.”

David DeKeyser, a marketing strategist in Brooklyn, New York, sought a physician’s advice via video after coming in contact with someone who attended an event where coronavirus was detected. The office charged the whole visit — $280, not just the copay ― to his debit card without notifying him.

“It happened to be payday for me,” he said. A week earlier and the charge could have caused a bank overdraft, he said. An email exchange got the bill reversed, he said.

With wider acceptance, telehealth calls have suddenly become an important and lucrative potential source of physician revenue. Medicare and some commercial insurers have said they will pay the same rate for video calls as for office visits.

Some doctors are charging for phone calls once considered an incidental and non-billable part of a previous office visit. Blue Cross plans in Massachusetts, Wyoming, Alabama and North Carolina are paying for phoned-in patient visits, according to America’s Health Insurance Plans, a lobbying group.

“A lot of carriers wouldn’t reimburse telephonic encounters” in the past, Corlette said.

Catherine Parisian, a professor in North Carolina, said what seemed like a routine follow-up call with her specialist last month became a telehealth consultation with an $80 copay.

“What would have been treated as a phone call, they now bill as telemedicine,” she said. “The physician would not call me without billing me.” She protested the charge and said she has not been billed yet.

By many accounts, the number of doctor encounters via video has soared since the Department of Health and Human Services said in mid-March that it would take “unprecedented steps to expand Americans’ access to telehealth services.”

Medicare expanded benefits to pay for most telemedicine nationwide instead of just for patients in rural areas and other limited circumstances, HHS said. The program has also temporarily dropped a ban on doctors waiving copays and other patient cost sharing. Such waivers might have been considered violations of federal anti-kickback laws.

At the same time, the CARES Act, passed by Congress last month to address the COVID-19 emergency, allows private, high-deductible health insurance to make an exception for telehealth in patient cost sharing. Such plans can now pay for video doctor visits even if patients haven’t met the deductible.

Dozens of private health insurers listed by AHIP say they have eliminated copays and other cost sharing for telemedicine. Cigna, however, has waived out-of-pocket costs only for telehealth associated with COVID-19 screening. Cigna did not respond to requests for comment.

Teladoc Health, a large, publicly traded telemedicine company, said its volume has doubled to 20,000 medical visits a day since early March. Its stock price has nearly doubled, too, since Jan. 1.

With such a sharp increase, it’s not surprising that insurers and physicians are struggling to keep up, said Circle Medical CEO Favvas.

“It’s going to be an imperfect process for a while,” he said. “It’s understandable given that things are moving so quickly.”

California Medical Insurance Providers

Abbie VanSickle, a California journalist, wanted her baby’s scheduled wellness visit done remotely because she worried about visiting a medical office during a pandemic. Her insurer, UnitedHealthcare, would not pay for it, the pediatrician told her. Mom and baby had to come in.

“It seems like such an unnecessary risk to take,” VanSickle said. “If we can’t do wellness visits, we’re surely not alone.”

A UnitedHealthcare spokesperson said that there was a misunderstanding and that the baby’s remote visit would be covered without a copay.

Jacklyn Grace Lacey, a New York City medical anthropologist, had a similar problem. She had to renew a prescription a few weeks after Cuomo ordered insurers to waive patient cost sharing for telehealth appointments.

The doctor’s office told her she needed to come in for a visit or book a telemedicine appointment. The video visit came with an “administrative fee” of $50 that she would have had to pay upfront, she said — five times what the copay would have been for an in-person session.

“I was not going to go into a doctor’s office and potentially expose people just to get a refill on my monthly medication,” she said.