What Is Coinsurance in Health Insurance?

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Coinsurance is the percentage you pay towards each covered medical service and is typically paid after you meet your plan's annual deductible. For example, a 20% coinsurance on a $100 doctor bill (after paying your deductible) would cost you $20 and your insurance company would pay the remaining $80.

Learn what types of health insurance plans may include coinsurance and how it relates to your copays and maximum out-of-pocket cost.

Key Takeaways

  • Coinsurance is the percentage amount that a policyholder must pay for their healthcare services, usually after their annual deductible has been met.
  • Coinsurance is a cost-sharing arrangement between the carrier and policyholder, which can help keep premiums low.
  • The higher your coinsurance, the lower your monthly premiums will be.
  • A high coinsurance is generally recommended for young or healthy people that don’t foresee frequent doctor visits in the near future.

What Is Coinsurance?

Coinsurance refers to the percentage amount that a policyholder must pay for their healthcare services, usually after their annual deductible has been met.

As a simplified example, let’s say you’ve met your annual deductible and you have a 20% coinsurance. If your next medical bill is $1,000, you would pay $200 ($1,000*0.20) and your carrier would pay $800.

Why Is Coinsurance Important in Healthcare?

Coinsurance is a form of cost-sharing between the insurance company and the policyholder. It protects the insurance company from bearing the full financial burden of the policyholder’s medical care and prevents people from using healthcare services unnecessarily. This helps keep premiums lower for everybody.

For policyholders, coinsurance can be a useful tool for managing their healthcare costs, as it allows them to choose a level of coinsurance that they are comfortable with. Choosing a high coinsurance means you’re paying a larger percentage of the medical bill. Generally, the higher the coinsurance ratio, the lower the monthly premiums will be (but the more the policyholder will be responsible for paying out of pocket).

Coinsurance also counts towards your out-of-pocket maximum. Once you pay enough out-of-pocket costs and reach this cap, you will no longer have to pay a coinsurance during the policy year.

How Does Coinsurance Work?

Look at coinsurance as a cost-sharing arrangement between you and your insurance company: after meeting your deductible, you pay a percentage of the cost of your healthcare services, while your carrier pays the rest.

Coinsurance is usually expressed as a ratio, such as 90/10, 80/20, 70/30 or 60/40, with the first number representing the percentage your carrier pays. The second number is what you pay.[1]

Consider this example: You have an 80/20 coinsurance arrangement, in which your carrier pays 80% of the healthcare service and you pay the remaining 20%. Your annual deductible is $2,000.

During your policy period, you become injured and face a $10,000 medical bill. You pay the first $2,000 to meet your deductible and the remaining balance is $8,000. Next, you pay $1,600 (20% of $8,000) and your provider pays the remaining $6,400 (80% of $8,000).

For plans that allow you access to out-of-network care, such as with a preferred provider organization (PPO), you will still get coverage for your medical services but at a higher cost. This means your coinsurance percentage will be higher than if you stay in-network.

How Does Coinsurance Differ From a Deductible and a Copay?

Coinsurance, deductibles and copays are all types of out-of-pocket expenses but each functions differently. A deductible is a fixed dollar amount that you must pay before your insurance plan begins to cover healthcare costs.

Remember: you will need to meet your deductible first and then coinsurance will apply to the remaining balance of your medical bill.

A copay is a flat fee that a patient pays when they visit their primary doctor or receive some other medical service. For example, a copay for a doctor's visit may be $20. The insurance company pays the rest of the cost. Unlike coinsurance, copays are paid regardless, even after you’ve met your annual deductible.

Keep in mind that a coinsurance is charged independently of a copay, not in place of it. So, it is possible for a consumer to pay a deductible, copay and coinsurance all for the same medical service.

When Do I Pay Coinsurance and How Much Does It Cost?

Coinsurance is usually paid after you have met your health insurance plan's deductible. You’ll be billed your coinsurance along with any copays upfront when you seek medical services.

Your coinsurance percentage will be based on the type of insurance plan you have and whether or not you have a deductible. The cost of coverage will vary depending on the tier you select. For example, a bronze plan may have a 60/40 coinsurance, while a platinum plan may have a 90/10 arrangement.[1]

Assuming you’ve already met your deductible, let’s look at how coinsurance payments would work across different plans.

Plan Category For a $1,000 Hospital Bill, Insurance Pays You Pay
60/40 (Bronze) $600 $400
70/30 (Silver) $700 $300
80/20 (Gold) $800 $200
90/10 (Platinum) $900 $100

What Types of Health Insurance Plans Use Coinsurance?

You will find coinsurance in many kinds of health insurance plans, including:

  • Affordable Care Act (ACA) Plans: Any health plan sold through your state's healthcare marketplace.
  • Private health insurance: Health insurance coverage that individuals or families purchase directly from a private insurance company instead of the health insurance marketplace.
  • Medicare: Federally-funded health insurance program that primarily covers people who are 65 or older, as well as those with certain disabilities or chronic health conditions.
  • Medicaid: Joint federal and state-funded program that provides health coverage to eligible low-income individuals and families, including pregnant women, children, and people with disabilities.

Should I Choose a Low or High Coinsurance?

Choosing a high coinsurance plan where you pay more out of pocket will result in a lower monthly premium. Healthcare plans with high coinsurance are generally great for young and/or healthy people who don’t foresee using their health insurance on a consistent basis. Additionally, you won’t be wasting money on a high premium for services you’re not using and are unlikely to use.

Conversely, a lower coinsurance in which you pay less out of pocket will pair with a higher rate and is ideal for people who regularly use their health insurance.

For example, platinum plans (highest premiums) have a 90/10 ratio, meaning the insurance company pays 90% of covered healthcare services and you pay 10%.[1] This means you get more financial coverage each time you receive a medical bill. Low coinsurance plans also come with a low deductible, so your provider will cover more of your healthcare costs sooner.

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What is the difference between coinsurance and copay?

Copays and coinsurance are both incurred when you receive a covered medical service but a copay is usually charged as a flat fee, while coinsurance is percentage-based.

How would coinsurance impact my healthcare costs?

Choosing a higher coinsurance means you pay more out of pocket for each service. However, this also means you'll meet your out-of-pocket maximum faster so your health plan 100% covers your medical services sooner.

What happens if I don’t pay my coinsurance?

Any health insurance medical bills you are unable to pay, including coinsurance, can be sent to collections. This can have a negative impact on your credit score.

What does 80% coinsurance mean?

80% coinsurance means your provider will cover 80% of a covered service and you will pay 20%. For example, if your hospital bill is $1,000, your insurer would pay $800, while you pay $200.

Does my coinsurance go towards my out-of-pocket maximum?

Coinsurance counts towards your out-of-pocket maximum, along with your copays and deductibles. After reaching your out-of-pocket maximum, your health insurance company will pay all of your medical expenses for the rest of the policy period.


  1. HealthCare.gov. “How to Pick a Health Insurance Plan.” Accessed March 6, 2023.

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