Coinsurance - What it is and How it Works

Dharun667

Coinsurance is a type of health insurance where the insured person is responsible for paying a percentage of their medical bills, while the insurance company pays the rest. The percentage that the insured person is responsible for paying is called the coinsurance rate. For example, if your coinsurance rate is 20%, and you have a $100 doctor bill, you would pay $20 and the insurance company would pay $80. Coinsurance typically applies after the deductible has been met. Coinsurance is different from copayments, which are a fixed amount that the insured person pays for each medical service, such as a $20 copayment for a doctor visit. Coinsurance is also different from deductibles, which is the amount that the insured person is responsible for paying before the insurance company will start to pay their medical bills.

smallpanda100

Coinsurance is a type of health insurance where the policyholder and their insurance company share the cost of a covered claim. It's different from a co-payment where the policyholder pays a set amount for a service or product and the insurance company pays the remainder.

When a policyholder has coinsurance, they will be responsible for paying a specific percentage of the cost of a covered claim. The insurance company will cover the rest. For example, if the coinsurance amount for a claim is 20%, and the service costs $100, the policyholder will be responsible for paying $20, and the insurance company will pay the remaining $80.

The amount of coinsurance held by the policyholder is typically determined by the terms of the health insurance plan, but it can also be impacted by the type of service or product that the policyholder needs.

The policyholder and the insurance company will both share the cost of a covered claim and this is important for both parties because it helps keep the cost of insurance lower for the policyholder and helps the insurance company manage risk.