What is coinsurance in the context of healthcare?

Coinsurance represents the specific percentage of healthcare costs that an insured patient is required to pay after their deductible has been satisfied. This means that once a patient has met their annual deductible—an amount they must pay out-of-pocket before their insurance begins to share the cost of care—they will still be responsible for a certain portion of the costs for covered services, as determined by their insurance plan.

For instance, if a patient has a coinsurance rate of 20%, they will pay 20% of the costs for services received after the deductible, while the insurance company covers the remaining 80%. This allows for a shared responsibility between the insurance provider and the insured patient regarding medical expenses.

In contrast, the total amount an insured patient pays typically encompasses not only coinsurance but also deductibles, premiums, and any copayments, making it a broader concept. The monthly premium reflects the cost of maintaining insurance coverage and is distinct from the payments made during the service. Lastly, the maximum out-of-pocket expense indicates a cap on what an insured individual pays in a given year, after which the insurance covers 100% of eligible expenses, but does not itself describe the shared cost arrangement defined by coinsurance.