What is Coinsuranc

What is Coinsurance?

November 19, 2020

What is Coinsurance?

Depending on what type of health insurance plan you get, coinsurance will be included in the plan. What is coinsurance? It is the percentage of covered health service you will pay for out-of-pocket after you meet your deductible. When your deductible is met, you will pay the full negotiated rate for a given covered health care cost in full.

Nearly every kind of health insurance plan has coinsurance. For example, if your medical bill is $1000 and your coinsurance is 20%, if you have not met your deductible yet, you will pay the full $1000. After meeting your deductible, you will pay a coinsurance amount of $200. Plans with higher monthly premiums typically have lower deductibles and lower coinsurance amounts.

Comparing Coinsurance, Copays, and Deductibles

The most confusing aspect of individual health insurance is wondering how much you pay for medical care when you pay it, and under what condition. Where most of the confusion occurs is in understanding the difference between coinsurance, copays, and deductibles.



A copay (or copayment) is a flat fee that you pay on the spot each time you go to your doctor or fill a prescription. For example, if you hurt your back and go see your doctor or need a refill of your child’s asthma medicine, the amount you pay for that visit or medicine is your copay. Your copay amount is printed right on your health plan ID card. Copays cover your portion of the cost of a doctor’s visit or medication.



A deductible is an amount you pay each year for most eligible medical services or medications before your health plan begins to share in the cost of covered services. For example, if you have a $2,000 yearly deductible, you’ll need to pay the first $2,000 of your total eligible medical costs before your plan helps to pay.

Deductibles for family coverage and individual coverage are different. Even if your plan includes out-of-network benefits, your deductible amount will typically be much lower if you use in-network doctors and hospitals.



Coinsurance is a portion of the medical cost you pay after your deductible has been met. Coinsurance is a way of saying that you and your insurance carrier each pay a share of eligible costs that add up to 100 percent.

The higher your coinsurance percentage, the higher your share of the cost is. You are also responsible for any charges that the health plan does not cover, such as charges that exceed the plan’s maximum reimbursable charge.

How Does Coinsurance Fit into Out-of-Pocket Expenses?

Coinsurance is an out-of-pocket expense. It is something extra you pay when you receive health care, on top of your monthly premium. Your plan might charge a copay for one type of service and coinsurance for another in some cases.

To fully understand how out-of-pocket expenses work, there are three additional terms to learn: deductibles, out-of-pocket maximums, and annual limits.



A deductible is a set amount that you must first pay before your insurance company begins chipping in its part. For example, if your policy comes with a $1,000 deductible, you pay the first $1,000 of your healthcare expenses during the policy year. Once you reach that number, your insurance company pays its portion of the bill.

High-deductible plans usually come with lower monthly premiums. You pay less each month for your plan but will have to pay more out of pocket before your plan starts contributing. A low-deductible plan usually means higher costs for the monthly premium, but your insurance covers expenses sooner because you reach your deductible faster.


Out-of-Pocket Maximum

An out-of-pocket maximum is the most you can pay out of pocket during a policy year. Once you reach that limit, the insurance company bears the remainder of any costs for the rest of the year. Deductibles, coinsurance, and copays all count toward your out-of-pocket maximum.


Annual Limit

An annual limit is the opposite of a deductible. An annual limit is the most money that a provider will pay for medical bills each year. After you reach the annual limit, you will pay for all the medical costs.

The Affordable Care Act (ACA) currently prohibits health insurance companies from placing annual dollar limits on most health benefits for employer-based and individual health plans, though there are exceptions. And under the ACA, ten essential health benefits may not be counted against an annual limit.

Which Health Insurance Plan is Best for Me?

You may be wondering which health insurance company is the best? When choosing a plan, you first need to assess your personal healthcare needs, look at all your options, and choose a health insurance plan that fits in your budget. How do you determine which health insurance is best? Ask yourself these questions:

  • How often do you visit your doctor?
  • What type of treatment do you need in the next 12 months?
  • What prescription drugs do you currently take?
  • Which healthcare providers/physicians do you prefer?

Once you decide your healthcare needs, you can narrow your search to health insurance companies in your state. Some of the health insurance providers that we work with include:

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  • Philadelphia-America
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We Offer Affordable Health Insurance in These States:

Contact Insurance Enterprise for Premier Health Insurance

If you have questions about group or individual health insurance and need health insurance quotes, contact Insurance Enterprise at 888-350-6605. Speak to a licensed agent and find out more about how you can get an affordable health insurance plan.