Coinsurance

Key Takeaways

• Coinsurance is the percentage of covered medical costs you share with your insurer after meeting your deductible
• Common coinsurance rates are 80/20, 70/30, or 90/10
• Coinsurance counts toward your out-of-pocket maximum
• It’s different from copays (fixed amounts) and deductibles (initial amount)
• Use our Health Insurance Calculator to estimate your coinsurance costs

What is Coinsurance?

In plain English: Coinsurance is the percentage of costs you pay for covered medical services AFTER you’ve met your deductible. For example, if your coinsurance is 20%, you pay 20% of the bill and your insurance pays 80%. It’s your share of the costs after you’ve hit your deductible.

Think of coinsurance as a “shared responsibility” model. Once you’ve paid your deductible, you and your insurance company split the remaining costs according to a predetermined percentage.

How Coinsurance Works

After Meeting Your Deductible

After you meet your deductible, your insurance company pays a percentage of covered expenses, and you pay the remaining percentage (your coinsurance). For example, with an 80/20 coinsurance plan, the insurance company pays 80% of covered costs, and you pay 20%. Coinsurance continues until you reach your out-of-pocket maximum.

Common Coinsurance Rates

• 80/20 Plan — Insurance pays 80%, you pay 20%
• 70/30 Plan — Insurance pays 70%, you pay 30%
• 60/40 Plan — Insurance pays 60%, you pay 40%
• 90/10 Plan — Insurance pays 90%, you pay 10%

Plan Type	Provider Choice	Referral Needed?	Premium Level
HMO	In-network only	Yes	Lower
PPO	In & out of network	No	Higher
EPO	In-network only	No	Medium
POS	In & out of network	Yes for specialists	Medium

Example of Coinsurance in Action

Let’s walk through a real-world example to understand how coinsurance works:

• You have a $1,000 deductible and an 80/20 coinsurance plan
• You receive a $5,000 medical bill
• You pay the first $1,000 (deductible)
• Insurance pays 80% of remaining $4,000 = $3,200
• You pay 20% of remaining $4,000 = $800 (coinsurance)
• Total out-of-pocket: $1,800

Coinsurance vs. Deductible vs. Copay

Understanding the difference between these cost-sharing mechanisms is essential:

• Deductible: Amount you pay before insurance starts covering costs
• Copay: Fixed amount paid at time of service
• Coinsurance: Percentage of costs shared after meeting the deductible

Out-of-Pocket Maximum

The out-of-pocket maximum is the most you’ll pay in a year for covered services. Once you reach this limit, your insurance company covers 100% of remaining covered expenses for the rest of the plan year. Coinsurance payments count toward this maximum, protecting you from unlimited financial liability.

Estimate Your Coinsurance Costs

Wondering how much coinsurance might cost you in a given year? Try our Health Insurance Calculator to model different scenarios and understand your potential out-of-pocket expenses.

Frequently Asked Questions (FAQ)

Q: Does coinsurance apply to all services?

A: Coinsurance typically applies to services after you’ve met your deductible, such as hospital stays, surgeries, and some specialist visits. Preventive services are usually covered at 100% with no coinsurance.

Q: Is coinsurance the same as copay?

A: No. A copay is a fixed amount (e.g., $30 for a doctor visit), while coinsurance is a percentage of the cost (e.g., 20% of a $100 bill = $20).

Q: Does coinsurance count toward my out-of-pocket maximum?

A: Yes, coinsurance payments typically count toward your out-of-pocket maximum. Once you reach the maximum, your insurance covers 100% of covered expenses.

Q: Can I choose my coinsurance rate?

A: You can choose between plans with different coinsurance rates. Plans with lower coinsurance (e.g., 90/10) usually have higher premiums, while plans with higher coinsurance (e.g., 70/30) have lower premiums.

Authority Sources

• Healthcare.gov - Official U.S. government health insurance marketplace
• U.S. Department of Health and Human Services (HHS)
• Insurance Information Institute (III)
• National Association of Insurance Commissioners (NAIC)
• CMS (Centers for Medicare & Medicaid Services) - U.S. federal health programs
• IRS (Internal Revenue Service) - Health savings account rules and tax penalties
• HHS (U.S. Department of Health and Human Services) - Health insurance marketplace

Related Terms

Health Insurance ACA (Affordable Care Act) Copay Medicare Deductible