What does coinsurance mean?

• A. A fixed monthly fee.
• B. A deductible portion.
• C. A separate charge at service.
• D. A policy provision where the policyholder and the insurance company share the cost of covered medical services.

Answer: (D)

Coinsurance is a cost-sharing arrangement in health insurance where you and the insurer share the cost of covered medical services. After you’ve met your deductible, you pay a percentage of the allowed amount for services, and the insurer pays the rest. This percentage is the coinsurance (for example, 20% you pay and 80% the insurer pays), and it applies up to your out-of-pocket maximum for the policy period. Some plans require coinsurance to apply to most services, while others may waive it for certain types of care.

This differs from a fixed monthly premium, which is the amount you pay to maintain the policy regardless of services used. It also differs from the deductible, which is the amount you must pay before coinsurance kicks in. Finally, it’s not a separate charge at the time of service—that would be a copayment, which is a fixed amount paid per visit or service.