Understanding Health Insurance Coinsurance: What You Need to Know

Depending on the type of health insurance coverage you carry, your insurance may include a coinsurance provision. You will need to pay your portion of the coinsurance amount as well as the deductible.

Identification

• Coinsurance is the portion of the coverage you share with your insurance company after you have paid the deductible, which is the amount you are required to pay out of your pocket before coverage begins.

Features

• Coinsurance is typically established as a ratio, such as 80/20 or 70/30. If your plan features an 80/20 coinsurance provision, for example, it means that after you've met your deductible, your insurer will pay 80 percent and you will pay 20 percent of the covered occurrence up to a specified amount.

Example

• Suppose your health insurance policy features a $500 deductible and an 80/20 coinsurance provision up to $2,000, and you file a claim for a covered event totaling $3,500. Your total out-of-pocket expense would be $800. You would be required to pay the $500 deductible as well as 20 percent of the next $1,500 ($300) until the $2,000 threshold is reached.