What Is Coinsurance in Health Insurance?
When choosing health insurance, the monthly premium is often the first cost people consider. But it is also important to understand what you may pay when you need a doctor’s visit, a test, or treatment.
One term you may see in your plan is coinsurance. Understanding how it works can help you compare your options and prepare for healthcare expenses.
What is coinsurance?
Coinsurance is the percentage you pay for a covered healthcare service. It generally applies after you have met the applicable deductible.
For example, if your plan has 20% coinsurance, you typically pay 20% of the allowed amount for the covered service, and your insurance plan pays the remaining share according to your coverage.
Simply put: coinsurance is a way to share the cost of certain covered healthcare services with your insurance plan.
How does coinsurance work?
Imagine you have already met your deductible and need a covered healthcare service. The allowed amount is $1,000, and your coinsurance is 20%:
| Cost | Amount |
|---|---|
| Allowed amount for the service | $1,000 |
| Your coinsurance: 20% | $200 |
| Your plan’s share: 80% | $800 |
This example is for illustration. Your actual cost depends on your plan, the service, the provider’s network status, and how much you have paid toward your out-of-pocket maximum.
What does 20% coinsurance mean?
A 20% coinsurance means you pay 20% of the allowed amount for a covered service to which that percentage applies. In many plans, this happens after you meet the deductible.
For example, if the allowed amount for a covered test is $500, your share would be $100, and your plan’s share would be $400, provided the coverage conditions are met.
Coinsurance percentages can vary by plan and service. A doctor’s visit, hospital stay, or prescription may have different cost-sharing rules.
Coinsurance vs. copay vs. deductible
These terms all relate to healthcare costs, but they work differently:
| Term | What it means | Example |
|---|---|---|
| Deductible | The amount you pay for certain covered services before your plan starts sharing those costs. | Your plan has a $1,500 deductible. |
| Copay | A fixed amount you pay for a covered service. | You pay $30 for a visit if your plan requires it. |
| Coinsurance | A percentage of the allowed amount you pay for a covered service. | You pay 20% for a service to which that percentage applies. |
Some plans cover certain services before you meet the deductible. Check your plan’s Summary of Benefits and Coverage to understand the rules for each service.
Does coinsurance count toward your out-of-pocket maximum?
Generally, coinsurance you pay for covered in-network services counts toward your out-of-pocket maximum.
Once you reach that limit, your plan pays 100% of the allowed costs for covered in-network benefits for the rest of the plan year.
Your monthly premium, services your plan does not cover, and certain out-of-network costs generally do not count toward that limit. Check your policy for the specific conditions.
Does every healthcare service have coinsurance?
No. Some services may have a fixed copay, some may be subject to a deductible and coinsurance, and others may be covered at no cost to you.
For example, many plans cover certain preventive services without a copay or coinsurance when provided in-network, even before you meet your deductible. Coverage depends on the service and applicable plan conditions.
What should you review when choosing a plan?
Look beyond the monthly premium and ask:
- What is the plan’s deductible?
- What coinsurance applies to services I may need?
- What will I pay for doctor visits, specialists, and prescriptions?
- Are my doctors and hospitals in the plan’s network?
- What is the out-of-pocket maximum?
- Which services are covered before I meet the deductible?
A plan with an affordable monthly premium may still have other costs that affect your budget when you receive care.
You can also learn why the same health plan may cost different amounts for different people.
Frequently asked questions about coinsurance
Do I pay coinsurance every month?
No. Your premium is the amount you pay to maintain your coverage. Coinsurance is a percentage you may pay when you receive a covered service to which coinsurance applies.
Do I pay coinsurance before or after the deductible?
Coinsurance generally applies after you meet the applicable deductible. However, rules can vary by plan and service.
What does 0% coinsurance mean?
It generally means you do not pay a percentage for the covered service to which that 0% applies, under the terms of your plan. Other rules, such as the deductible or network requirements, may still apply.
Is coinsurance the same as a copay?
No. Coinsurance is a percentage of the allowed amount, while a copay is generally a fixed amount for a covered service.
Where can I find my coinsurance amount?
Check your plan’s Summary of Benefits and Coverage. Review the details for each service and look for differences between in-network and out-of-network providers.
Understand your coverage with confidence
Knowing how coinsurance works gives you a clearer picture of what you may pay for healthcare. When comparing plans, consider your health needs and your budget, including both the monthly premium and the costs of using your coverage.
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You may also be interested in learning when you can enroll outside of Open Enrollment.
This content is for informational purposes. Costs and benefits depend on the plan, coverage, and applicable conditions.
