What is coinsurance in health insurance?

Coinsurance is the percentage of medical costs you pay for covered services after you've met your deductible. For example, if your plan has 20% coinsurance and a procedure costs $1,000, you pay $200 and your insurance pays $800. Coinsurance continues until you reach your out-of-pocket maximum.

Is 80/20 coinsurance good?

80/20 coinsurance is common and generally considered good coverage. It means your insurance pays 80% of covered costs and you pay 20%. Some plans offer 90/10 or even 100/0 coinsurance with higher premiums. Plans with 70/30 or 60/40 coinsurance cost less monthly but leave you paying more when you need care.

Do I pay coinsurance before or after my deductible?

You pay coinsurance AFTER meeting your deductible. First, you pay the full cost of services until your deductible is met. Then, you start paying your coinsurance percentage while insurance covers the rest. This continues until you reach your out-of-pocket maximum.

What is the difference between coinsurance and copay?

A copay is a fixed dollar amount (like $30) you pay regardless of the service cost. Coinsurance is a percentage (like 20%) of the cost, so your payment varies based on the bill. A $30 copay is always $30, but 20% coinsurance on a $500 bill is $100, while 20% on a $5,000 bill is $1,000.

What is Coinsurance? | Insurance Terms Explained

Coinsurance (noun) The percentage of costs you pay for a covered health care service after you've met your deductible. For example, with 20% coinsurance, you pay 20% and your insurance pays 80%.

Think of coinsurance as cost-sharing with your insurance company. Once you've paid your deductible, you and your insurer split the remaining bills. The split continues until you reach your out-of-pocket maximum, then insurance pays everything.

How Coinsurance Works

Coinsurance kicks in after your deductible is met:

You pay your deductible first (the full cost of care)
Once the deductible is met, coinsurance begins
You pay your percentage (like 20%); insurance pays theirs (80%)
This continues until you hit your out-of-pocket maximum
After the max, insurance covers 100%

Real-World Example

Lisa has a $1,500 deductible and 20% coinsurance. She needs surgery costing $10,000.

First, she pays her $1,500 deductible. The remaining $8,500 is split: Lisa pays 20% ($1,700) and insurance pays 80% ($6,800).

Lisa's total: $1,500 + $1,700 = $3,200 for a $10,000 surgery.

Understanding Coinsurance Ratios

Coinsurance is usually expressed as two numbers, like "80/20." The first number is what insurance pays; the second is what you pay.

You Pay20%

Insurance Pays80%

Common Coinsurance Ratios:

90/10: Insurance pays 90%, you pay 10% (excellent coverage, higher premiums)
80/20: Insurance pays 80%, you pay 20% (most common, balanced)
70/30: Insurance pays 70%, you pay 30% (lower premiums, more risk)
60/40: Insurance pays 60%, you pay 40% (bronze-level plans)

Coinsurance for Different Service Costs

Because coinsurance is a percentage, your actual dollar amount changes based on the service cost:

Service Cost	20% Coinsurance	30% Coinsurance
$500	$100	$150
$2,000	$400	$600
$10,000	$2,000	$3,000
$50,000	$10,000	$15,000

This is why your out-of-pocket maximum is so important. It caps your coinsurance payments so a major illness doesn't bankrupt you.

Pro Tip from Us

When comparing plans, calculate your potential costs for a bad year. A plan with 30% coinsurance and a $8,000 out-of-pocket max might cost you more than a plan with 20% coinsurance and a $6,000 max, even if the premium is lower. Run the numbers for your situation.

Coinsurance for In-Network vs. Out-of-Network

Most plans have different coinsurance rates depending on where you get care:

In-network: Lower coinsurance (you pay less) - typically 20%
Out-of-network: Higher coinsurance (you pay more) - often 40% or higher

Using in-network providers can save you significant money on coinsurance costs. Some plans don't cover out-of-network care at all, except in emergencies.

When Services Use Coinsurance

Coinsurance typically applies to:

Hospital stays and inpatient care
Surgical procedures
Diagnostic imaging (MRI, CT scans)
Lab work and blood tests
Outpatient procedures
Durable medical equipment

Services like routine doctor visits often use copays instead. See Copay vs. Coinsurance for more details.

Confused About Your Coinsurance Costs?

Our licensed agents can help you understand your plan and find coverage with coinsurance rates that fit your budget.

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Frequently Asked Questions

Does coinsurance count toward my out-of-pocket maximum?

Yes. Every dollar you pay in coinsurance counts toward your out-of-pocket maximum. Once you reach the max, your insurance pays 100% of covered services for the rest of the plan year. No more coinsurance payments.

Why do I have to pay coinsurance if I already paid my deductible?

Your deductible and coinsurance are separate cost-sharing mechanisms. The deductible is your "entry point" to coverage. After that, coinsurance is how you and your insurance split costs until you reach your out-of-pocket maximum. Together, they help keep premiums more affordable.

What's better, lower coinsurance or lower deductible?

It depends on your expected healthcare use. If you anticipate many medical expenses, lower coinsurance might save more since you'll be paying that percentage on every bill after your deductible. If you rarely need care, a lower deductible with higher coinsurance could work better.

Can my coinsurance ever be 0%?

Yes. Some plans offer 0% coinsurance after the deductible is met, meaning insurance pays 100% of covered costs after deductible. These plans have higher premiums but offer great protection if you need significant care. Also, after reaching your out-of-pocket maximum, your effective coinsurance becomes 0%.

What is Coinsurance?