What is coinsurance?

Coinsurance is a percentage of the total cost of a medical service that is paid out-of-pocket, but the percentage may vary depending on whether the service received is inside or outside of the plan's network. Coinsurance does not have to be paid until after the plan's deductible has been met.

Example:

  • Amina has a $ 2 ,000 deductible that she already reached, and 20% coinsurance.
  • If Amina then incurs a $250 medical bill, Amina would pay $50 out of pocket, and her insurance company would pay $200.

When is coinsurance commonly used?

Coinsurance is generally used for more involved and less common services, like hospital stays and medical equipment. Coinsurance is also heavily used for Out-of-Network services.

Coinsurance kicks in when one's deductible has been met, unless otherwise specified on the plan SBC.

Example:

  • Noriko breaks her leg and needs to see a physical therapist for rehabilitation.
  • She has a $1000 deductible that has already been met for the year.
  • She sees a physical therapist that is out-of-network, and the benefit for out-of-network rehabilitation services is a 50% coinsurance.
  • Because her deductible is met, co-insurance kicks in immediately.
  • A $200 visit to her physical therapist will cost Noriko $100, and her insurance carrier will pay the other $100.

Copay or Coinsurance?

Covered services will be subject to either a copay or coinsurance. Who provides the service (an in-network or out-of-network provider) also factors in. The plan's Summary of Benefits and Coverage will summarize what services are subject to a copay and which are subject to coinsurance, and when they would apply.

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