Coinsurance

What It Means

Coinsurance is the percentage of a covered health care cost you pay once your deductibleInsurance deductibleThe part of a covered loss you pay yourself before your home, renters or auto insurance pays the rest, set as a dollar amount or a percentage. See more is met, while the plan pays the remaining percentage. With 20% coinsurance, a covered $1,000 bill after the deductible costs you $200 and the plan $800. Coinsurance, copaysCopayA fixed dollar amount, such as $20, that you pay for a covered health care service under your health insurance plan. See more and the deductible for covered in-networkIn-networkDescribes a doctor, hospital or other provider that has a contract with your health plan, so you usually pay less for covered care than you would outside the network. See more care all count toward the out-of-pocket maximumOut-of-pocket maximumThe most you pay in a plan year for covered in-network care through deductibles, copays and coinsurance, after which the plan pays covered benefits in full. See more, and after you reach it the plan pays for covered benefitsBenefits packageEverything an employer offers on top of wages, such as health insurance, paid leave and a retirement plan, which can be worth thousands of dollars a year. See more in full.

How People Say It

• "After the deductible it's 80/20, so we owe 20%."
• "The coinsurance on that surgery is going to hurt."
• "Is that 20% of the full bill or what insurance allows?"

The Breakdown

Formula

You pay = whatever deductible is still owed + (coinsurance rate × the covered cost left after the deductible), and never more than what's left before your out-of-pocket maximum.

Worked example. A covered bill of $3,000 arrives when $500 of the deductible is still unpaid, on a plan with 20% coinsurance:

What the result means. Coinsurance grows with the bill, so a large bill can cost you more than a flat copay would. The out-of-pocket maximum is what stops it: once your deductible, copays and coinsurance for covered in-network care reach that ceiling, the plan pays for covered benefits in full.

Good to Know

Coinsurance applies to covered services. A plan can set a different rate for out-of-networkOut-of-networkDescribes a provider that has no contract with your health plan, so the plan pays less or nothing for the care and you may be billed more. See more care, and HealthCare.gov's glossary lists in-network and out-of-network coinsurance as separate terms, so check which one applies before a big bill. The same glossary is the plain-language source for how coinsurance, the deductible and the out-of-pocket maximum fit together.

Related Terms and Categories

• Copay

  A fixed dollar amount, such as $20, that you pay for a covered health care service under your health insurance plan.

• Health insurance deductible

  What you pay on your own for covered health care before your health insurance plan begins sharing the cost.

• Out-of-pocket maximum

  The most you pay in a plan year for covered in-network care through deductibles, copays and coinsurance, after which the plan pays covered benefits in full.

• Health insurance

  A plan you pay a premium for that covers part of your medical costs, while you pay your own share through a deductible, copays and coinsurance.

• Explanation of benefits

  A statement from your health plan, not a bill, that shows what a provider charged for a visit, what the plan paid and what you may owe.

• Out-of-network

  Describes a provider that has no contract with your health plan, so the plan pays less or nothing for the care and you may be billed more.

Planning and life admin