What is Health Insurance Coinsurance?


WRITTEN BY: Craig Sturgill

UPDATED: DECEMBER 27, 2022 | 1 MIN READ

Coinsurance is a term that can be confusing, especially if you haven’t purchased a health plan before. Not every healthcare plan features coinsurance, but if yours does, you should know what’s covered and the percentage you’ll be responsible for when you seek care. Read on to learn about health insurance coinsurance, how it works, and everything else it concerns.

What Is Coinsurance and How Does It Work?

As you read through your health insurance policy documents, you will likely come across the term coinsurance. Coinsurance is your share of the costs of covered medical services and is often listed as a percentage. Before coinsurance, you must meet your deductible or the amount you must pay before your health insurance company covers your medical costs for covered services.

What is Coinsurance?

Coinsurance is the percentage of costs you pay after you meet your deductible. This cost-sharing splits the costs of a specialist visit, prescription, or other healthcare needs between you and your insurance provider. One of the most popular coinsurance is 80/20. Coinsurance of 80/20 means an insurance company will pay 80% of the costs of covered services, and the patient will pay 20% until they reach their out-of-pocket limit. Most Medicare Part B plans feature 80/20 coinsurance.

When do You Pay Coinsurance?

You pay coinsurance once you meet your health insurance policy’s deductible. Each time you have a medical office visit or get a prescription, you’ll pay a certain percentage of the costs. Your share is itemized on the bills from your medical providers. Coinsurance doesn’t apply to preventative care, such as a screening or an immunization. Unlike co-pays, you don’t pay your coinsurance rate until after you receive care. Do note that some healthcare plans may feature 0% coinsurance.

What Does Coinsurance After Deductible Mean?

You’ll pay whatever the stated percentage is, and your carrier will cover the remaining amount. Coinsurance doesn’t apply until after you hit your annual deductible. If you have a high deductible, it can be a while until coinsurance kicks in.

What’s the Difference Between Coinsurance and a Co-Pay?

Although they are both cost-sharing methods, coinsurance is not a form of a co-pay. Co-pay amounts are flat fees, while coinsurance costs are displayed as percentages. Your co-pay can sometimes count towards your deductible, and you may have co-pays even after you meet your deductible. Most co-pays are under $100, especially for routine doctor visits or virtual appointments. Your coinsurance varies based on the actual care costs, so it may be over $100 for a specialist visit or a medical procedure.

Does 0% Coinsurance Mean No Co-pay?

A healthcare plan with 0% coinsurance is rare. You may still have a co-pay even after 0% coinsurance, especially if you haven’t reached your out-of-pocket maximum. An HMO plan typically doesn’t have coinsurance. Most state Medicaid agencies pay coinsurance for Medicaid recipients.

How To Calculate Coinsurance Costs

Calculating costs for coinsurance can be tricky. First, take your coinsurance rate from your policy documents. Notice if it has a coinsurance percentage for hospitalization or other medical services. Then look at your in-network medical provider. If you stay in-network, your health plan provider will be billed at a discounted rate compared to an out-of-network provider. Your Explanation of Benefits (EOB) statement will list the in-network amount. This is provided to you after you receive a service.

If you don’t know the cost because you haven’t had the procedure yet or you’re hospitalized, you can ask the provider for costs if it’s for a standard service, such as an MRI. You may have to estimate if it’s a complicated procedure, such as surgery.

How To Lower Coinsurance Rates

You may lower your coinsurance rates if you sign up for health insurance through the Affordable Care Act (ACA) Marketplace. These discounts are called cost-sharing reductions and only apply to Silver healthcare plans. Cost-sharing reductions are based on income and household size. If you qualify, you may have a lower coinsurance rate. To save on coinsurance costs, look into a Silver plan as you sign up through the Marketplace.

FAQs

What does 20% coinsurance mean?

If your health insurance plan features 20%, you only pay 20% of all covered costs after you reach your deductible. Your insurance company will cover the remaining 80% of the costs.

How is coinsurance different from a co-pay?

Coinsurance is a percentage of costs, and a co-pay is a fixed amount. The coinsurance amount depends on the costs of your health care services, so the amount varies. For 20% coinsurance, if you have a $1,000 medical bill, you pay $200 while your insurer pays the remaining $800.

How is coinsurance different from a deductible?

Coinsurance is what you pay after you meet your deductible. It doesn’t apply after you reach the deductible.

What does 70% coinsurance mean?

A plan with 70% coinsurance pays 70% of your covered medical costs, and you pay 30%.

Is there a cap on coinsurance?

Coinsurance counts in your out-of-pocket cap. A typical cap can be $2,000 to $3,000. Once you reach the stated cap, your insurance company will cover all reasonable costs for your medical care for the rest of the year.

Get Help Lowering Your Health Insurance Coinsurance and Premiums

When you buy a health insurance policy, you must consider your coinsurance rate. Your coinsurance will list your percentage of the medical care costs. When you begin enrollment for a new healthcare plan, notice the coinsurance rates and compare the best options. Fill out our online rate form to compare rates and see what each health plan may offer.