What is Coinsurance?

After the health plan’s deductible has been paid, the percentage of costs for a covered healthcare service paid out of pocket is called coinsurance.

For example, a health plan may cover $100 for a doctor’s office visit and require a coinsurance payment of 20%. Once the deductible has been paid, the health plan member must pay 20% — or $20 — for the coinsurance, and the insurance company pays the rest. If the deductible has not been paid, the member must pay the total allowed amount — in this case, $100.

Coinsurance differs from a copay, which are predetermined amounts the plan member pays each time they use a service. Coinsurance is the percentage of costs the member pays after they’ve met the deductible.

For people requiring extensive medical services, a plan with a lower copay and coinsurance amount make more sense, even if that means paying a higher monthly premium.