insurance

coinsurance

A cost-sharing arrangement where the insured pays a percentage of covered expenses after the deductible is met, typically 20%, with the insurer paying the remaining 80%.

Example

“After meeting her $2,000 deductible, her 80/20 coinsurance meant she paid 20% of remaining medical bills.”

Memory Tip

COINSURANCE = you and the insurer split costs together. Typically 80% insurer, 20% you.

Why It Matters

Coinsurance directly impacts how much you will pay out of pocket for medical care and other covered services. Understanding your coinsurance percentage helps you budget for healthcare expenses and compare different insurance plans based on their true cost to you.

Common Misconception

Many people think coinsurance only applies to major medical procedures, but it typically applies to most covered services including doctor visits, lab work, and preventive care. Some also mistakenly believe coinsurance means they pay a fixed dollar amount rather than a percentage of the actual cost.

In Practice

If you have a 20 percent coinsurance and receive a medical service that costs 500 dollars after meeting your deductible, you would pay 100 dollars while your insurance company pays 400 dollars. This same 20 percent split applies whether your next visit costs 200 dollars or 2000 dollars.

Etymology

CO- (together) + INSURANCE. You and the insurer SHARE (co-insure) the cost.

Common Misspellings

co-insurancecoinsurincecoinsurnace

More in insurance

Other insurance terms you should know

deductibleThe amount you pay out-of-pocket before your insurance begin…insurance premiumThe amount paid periodically to an insurance company in exch…deductibleThe amount a policyholder must pay out of pocket before insu…copayA fixed amount paid by an insured person at the time of a me…out-of-pocket maximumThe most an insured person will pay for covered healthcare s…term life insuranceLife insurance that provides coverage for a specific period …

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