Insurance

What is Coinsurance?

Coinsurance is your share of medical costs after you’ve met your deductible. For example, with 20% coinsurance, you pay 20% and insurance pays 80%. For example, if your plan's coinsurance is 20%, you pay 20% of the allowed medical bill, and the insurance company pays 80%, until you reach your annual out-of-pocket maximum. Coinsurance is the primary method of cost-sharing in major medical insurance policies.

Coinsurance rates vary depending on the plan's metal tier (Bronze, Silver, Gold, Platinum) on the health insurance marketplace. Bronze plans typically have higher coinsurance rates (e.g., 40%), while Platinum plans have lower rates (e.g., 10%), shifting more cost to the insurer in exchange for higher premiums.

Quick Facts

Cost FormatPercentage of the insurer's allowed charge (e.g., 20%)

Trigger EventApplies after the annual deductible has been fully met

Standard Split80% paid by insurer / 20% paid by policyholder

Out-of-Pocket CapStops when the annual out-of-pocket maximum is reached

PRACTICAL EXAMPLE

An individual has met their annual deductible. They receive a covered hospital bill with an allowed cost of $2,000. Under their plan's 20% coinsurance rate, they pay $400, and the health insurance company pays the remaining $1,600.

RELATED TERMS

Learn More Key Concepts

DeductibleThe amount a policyholder must pay out of pocket for covered claims before their insurance coverage begins to pay.

CopayA fixed dollar amount paid by an insured individual for a specific medical service, visit, or prescription drug.

Out-of-Pocket MaximumThe annual limit on a policyholder's covered medical expenses, after which the insurer pays 100% of covered benefits.

Health Insurance MarketplaceThe federal or state platform where individuals shop for health insurance and apply for premium tax credits.

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