Coinsurance - Glossary (2024)

FAQs

Coinsurance - Glossary? ›

The percentage of costs of a covered health care service you pay (20%, for example) after you've paid your deductible.

The amount of money not covered by a patient's health insurance that the patient pays for each health care service. For example, if a plan covers 80% of the cost of a service, then the coinsurance that the patient pays will be the remaining 20% of the cost.

Coinsurance kicks in after the policy deductible is satisfied. One of the most common coinsurance breakdowns is the 80/20 split: The insurer pays 80%, the insured 20%. Copays require the insured to pay a set dollar amount at the time of the service.

Coinsurance is a percentage of a medical charge you pay, with the rest paid by your health insurance plan, which typically applies after your deductible has been met. For example, if you have 20% coinsurance, you pay 20% of each medical bill, and your health insurance will cover 80%.

Coinsurance is the amount you pay for covered health care after you meet your deductible. This amount is a percentage of the total cost of care—for example, 20%—and your Blue Cross plan covers the rest. Learn more about coinsurance and how to calculate your costs below.

The percentage of costs of a covered health care service you pay (20%, for example) after you've paid your deductible. The maximum amount a plan will pay for a covered health care service. May also be called “eligible expense,” “payment allowance,” or “negotiated rate.”

Coinsurance is usually expressed as a percentage. Most coinsurance clauses require policyholders to insure 80%, 90%, or 100% of a property's actual value. For instance, a building valued at $1,000,000 replacement value with a coinsurance clause of 90% must be insured for no less than $900,000.

Common coinsurance is 80%, 90%, or 100% of the value of the insured property. The higher the percentage is, the worse it is for you. It is important to note, as a way of preventing frustration and confusion at the time of loss, coverage through the NREIG program has no coinsurance.

Simply put, 80/20 coinsurance means your insurance company pays 80% of the total bill, and you pay the other 20%. Remember, this applies after you've paid your deductible.

It's great to have 0% coinsurance. This means that your insurance company will pay for the entire cost of the visit or session. But often, you first have to meet your deductible in order for the coinsurance to kick in.

Is it better to have coinsurance or copay? ›

Copays are generally less expensive than coinsurance, so coinsurance will comprise much more of your out-of-pocket costs than copays. For instance, a primary care visit may cost you $25 for a copay, while that visit may cost you hundreds or thousands in coinsurance for tests and services.

The simple formula for calculating the coinsurance penalty is: amount of insurance in place / Amount of insurance that should have been in place x the loss, less any deductible is the amount actually paid.

A deductible is the amount you pay for coverage services before your health plan kicks in. After you meet your deductible, you pay a percentage of health care expenses known as coinsurance. It's like when friends in a carpool cover a portion of the gas, and you, the driver, also pay a portion.

After you meet your annual health insurance deductible, you share medical costs with your insurer until the end of the plan year. Your percentage of those costs is called coinsurance. Your coinsurance may be high (80% to 100%) or low (0% to 20%). Typically, it is less than 50%.

Having 100% coinsurance means you pay for all of the costs — even after reaching any plan deductible. You would have to pick up all of the medical costs until you reach your plan's annual out-of-pocket maximum.

For example, if 80% coinsurance applies to your building, the limit of insurance must be at least 80% of the building's value. If the policy limit you have selected does not meet the specified percentage, your claim payment will be reduced in proportion to the deficiency.

If you have 40% coinsurance after the deductible, you will pay the deductible first and then 40% of the costs. 50% coinsurance means the same thing; only you will pay 50% of costs. While these are higher upfront costs, you will reach your out-of-pocket limit faster.

Your coinsurance may be high (80% to 100%) or low (0% to 20%). Typically, it is less than 50%. Your coinsurance drops to 0% once you reach your out-of-pocket maximum for the year.

The coinsurance clause means you need to insure the whole value (100%) of your business personal property, not just a portion. If you purchase a lower coverage limit, you are accepting responsibility for the difference in coverage, which is where the "co" in coinsurance comes from.