What is Coinsurance?

Once you meet your insurance plan’s deductible, you’ll likely begin to share some of the costs of your medical care with your health insurance plan. If your plan requires coinsurance, then that is the part you pay while your health plan pays the remainder.

Coinsurance is typically a percentage of the total cost of covered care. It could be a 50/50 split, where you and your insurer both pay half. Or it could be an 80/20 split, where you pay 20%. Or it could be some other percentage. Your coinsurance will vary according to the insurance plan you select, and some plans may not require coinsurance.

How Does Coinsurance Work?

If your plan requires coinsurance, you will pay 100% of out-of-pocket costs until you meet your deductible. After that, you pay your coinsurance percentage. So if your coinsurance is 50% after deductible, then you will pay half of the amount your provider is allowed to bill, and your insurer will pay the other half. But if your coinsurance is 20%, then you would pay that, and your insurer would pay the remaining 80%. This continues until you reach your out-of-pocket maximum.

For example, if the allowed amount for a covered medical service is $100, and you have already met your deductible, then you would just pay your coinsurance portion. If your coinsurance is 50%, you would then pay half of the $100 – or $50. If your coinsurance is 20%, then you would only have to pay 20% of the $100, which is $20.

When Do I Pay Coinsurance?

After you meet your deductible, you then begin to pay coinsurance. When you seek medical care or services, the provider may collect your portion at the time of service. Or the care provider may bill you later for your part of the allowed amount.

Once you have met your out-of-pocket max for the year, your plan will pay your covered medical and prescription costs for the rest of the year. However, if you seek care from an out-of-network provider or services that are not covered, you could be required to pay, even if you have met your out-of-pocket max.

What’s the Difference Between Coinsurance and Copayment?

Both coinsurance and copayment – also known as copay – are ways that you and your insurer share your healthcare costs. Coinsurance is a percentage you pay after your deductible is met. A copay is a set dollar amount, like $40 or $50, you may have to pay whenever you visit an in-network provider or fill a prescription – even if you have met your deductible.

This chart summarizes some of the important differences between coinsurance and copayment.

How Do I Know What My Coinsurance Is?

If you already have health insurance or if you’re currently shopping for plans, you can see the coinsurance percentage in each plan’s “Summary of Benefits and Coverages.” The coinsurance percentage is usually noted in the “What You Will Pay” columns.

The percentage could vary according to the type of service or type of prescription medication. So when you’re evaluating plans, be sure to check all “What You Will Pay” columns to fully understand how costs are shared.

Questions about Coinsurance