What does coinsurance mean in the context of health insurance?

Coinsurance refers to the arrangement in health insurance where the insured and the insurer share the costs of covered healthcare services after the deductible has been met. This means that after the insured has paid the deductible, both parties contribute to the costs of further medical expenses according to a predetermined percentage. For example, if a policy has a coinsurance of 20%, the insured would pay 20% of the covered expenses while the insurer would cover the remaining 80%.

This structure encourages the insured to share in the cost of care, which can help manage the costs of insurers by discouraging unnecessary medical services. Understanding coinsurance is essential because it directly impacts the out-of-pocket expenses that insured individuals should plan for when accessing healthcare services.