What is co-insurance?

Co-insurance is a cost-sharing requirement that refers to the percentage of covered healthcare expenses that a policyholder is required to pay after they have satisfied their deductible. Once the deductible is met, the insurance company pays its share of the costs, and the individual is responsible for paying a specified percentage of the remaining balance. For example, if a person has a 20% co-insurance rate, they would pay 20% of the costs for covered services after meeting the deductible, while the insurance company covers the remaining 80%.

This understanding of co-insurance distinguishes it from other terms related to healthcare costs. A fixed dollar amount due at the time of service pertains more to a copayment, while an annual fixed amount that must be met before insurance kicks in defines a deductible. The total amount charged by a provider for services rendered reflects the overall cost but does not capture the sharing aspect that is central to co-insurance. Thus, the definition involving out-of-pocket expenses after the deductible best aligns with the concept of co-insurance.