Coinsurance
The percentage of covered health care costs you pay after meeting your deductible, with the insurer paying the rest.
In health insurance, coinsurance is the cost-sharing percentage you pay for covered services after you have met your annual deductible. The most common split is 80/20: the insurer pays 80% of covered costs, and you pay 20% until you reach the out-of-pocket maximum. Other common splits are 70/30 and 90/10.
Coinsurance differs from copays: copays are flat fees; coinsurance is a percentage of the allowed amount for the service. A 20% coinsurance on a $10,000 surgery after a $2,000 deductible means you owe $2,000 (the deductible) plus 20% of the remaining $8,000 ($1,600 coinsurance) for a total of $3,600.
In property insurance, coinsurance has a different meaning: it is a clause requiring you to insure your property for at least a specified percentage (usually 80%) of its replacement cost. Failing to meet the coinsurance requirement results in a penalty that reduces claim payments on partial losses proportionally.
Real-World Example
With an 80/20 coinsurance plan, the patient paid $400 (20% of the $2,000 surgery cost after meeting the deductible); the insurer paid $1,600.