Coinsurance (Health Insurance)
Plain English
Coinsurance is your percentage share of a covered health care bill after you've met your deductible. With 20% coinsurance on a $100 visit, you pay $20 and the plan pays $80. It keeps going until you hit your out-of-pocket maximum for the year. After that, the plan generally pays covered in-network costs in full.
Read to the end to complete this term.
On this page
Definition
In health insurance, coinsurance is the percentage of the allowed cost of a covered service that the member pays, such as 20%, generally after meeting the deductible. The plan pays the remaining percentage. Coinsurance applies until the member reaches the plan's out-of-pocket maximum, after which the plan generally pays 100% of covered in-network costs for the rest of the plan year.
Why It Matters
On a big bill, coinsurance is where most of your costs come from after the deductible. A 20% share of a $12,000 hospital stay is far more than any copay. Knowing how coinsurance and the out-of-pocket maximum work together tells you the most a serious illness could cost you in a year.
Real-World Example
HealthCare.gov's high-cost example: allowed costs are $12,000, the deductible is $3,000, and coinsurance is 20%. You pay the first $3,000. On the remaining $9,000, you pay 20%, which is $1,800, and the plan pays $7,200. Your total is $4,800, unless your out-of-pocket maximum is lower, in which case you stop paying when you reach it.
Common Misconceptions
- Coinsurance means the insurer pays 20%. It's usually your share; a plan with 20% coinsurance pays 80%.
- Coinsurance has no cap. The out-of-pocket maximum limits what you pay for covered in-network care in a plan year.
- It's the same as coinsurance in property insurance. Commercial property coinsurance is a rule about insuring to value, a different concept.
Key Takeaways
- HealthCare.gov: coinsurance is "the percentage of costs of a covered health care service you pay (20%, for example) after you've paid your deductible."
- Before the deductible is met, you generally pay the full allowed amount.
- Coinsurance stops once you reach the out-of-pocket maximum.
- Out-of-network care can carry higher coinsurance, or none of it may count, depending on the plan.
Frequently Asked Questions
What is coinsurance in health insurance?
Your percentage share of the allowed cost of a covered service after the deductible, such as 20%. The plan pays the rest.
What does 20% coinsurance mean?
After you meet your deductible, you pay 20% of the allowed amount for a covered service and the plan pays 80%, until you reach your out-of-pocket maximum.
Is coinsurance better than a copay?
Neither is better on its own. A copay is predictable; coinsurance scales with the bill. Compare the whole plan, including the out-of-pocket maximum.
Does coinsurance count toward the out-of-pocket maximum?
Generally yes, for covered in-network care. Once you reach the maximum, the plan pays 100% of covered in-network costs for the rest of the year.
Related Terms
Related Coverages
- Health Insurance
Related Scenarios
Explore the rest of the Health Insurance category.
Browse Health Insurance terms →Sources
The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- healthcare.govCoinsurance - Glossary · HealthCare.gov (U.S. Centers for Medicare & Medicaid Services)
- healthcare.govOut-of-pocket maximum/limit - Glossary · HealthCare.gov (U.S. Centers for Medicare & Medicaid Services)
Educational information, not advice: This page is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers.