What is Coinsurance
Coinsurance is the percentage of covered medical costs you pay after meeting your deductible, with your insurance plan paying the remaining percentage.
Coinsurance is your share of costs for a covered health care service, expressed as a percentage, that you pay after you've met your deductible. For example, if your plan has 20% coinsurance, you pay 20% of each covered bill, and your insurer pays the remaining 80% — until you reach your out-of-pocket maximum.
The most common coinsurance split is 80/20: the insurer pays 80%, you pay 20%. More generous plans offer 90/10 or even 100/0 (no coinsurance). High-deductible plans may have 70/30 coinsurance.
Coinsurance in Action
Say you need outpatient surgery that costs $10,000 (after your insurer's negotiated rate). You have a $2,000 deductible and 20% coinsurance.
- You pay the first $2,000 toward your deductible.
- The remaining $8,000 is subject to coinsurance.
- You pay 20% of $8,000 = $1,600.
- Your insurer pays the remaining $6,400.
- Your total cost for the procedure: $3,600.
If you hadn't yet met your deductible at all this year, this one surgery would cost you $3,600. If you had already met your deductible, it would cost only $1,600.
Coinsurance vs. Copay
| Feature | Coinsurance | Copay |
|---|---|---|
| Format | Percentage (e.g., 20%) | Flat fee (e.g., $30) |
| Predictability | Varies with service cost | Fixed regardless of cost |
| Common for | Hospital care, imaging, surgery | Office visits, prescriptions |
| Requires deductible first? | Usually yes | Often no |
Many plans use both: copays for everyday services (doctor visits, prescriptions) and coinsurance for higher-cost services (surgery, hospital stays, specialty care).
How Coinsurance Interacts With the Out-of-Pocket Maximum
Coinsurance payments count toward your out-of-pocket maximum. Once you've paid enough in deductibles, copays, and coinsurance to hit that cap, your insurance covers 100% for the rest of the plan year. This protection is critical for people who face serious illness or injury.
In-Network vs. Out-of-Network Coinsurance
Your coinsurance percentage is almost always higher for out-of-network providers. A plan might offer 20% in-network coinsurance but 40–50% out-of-network — and out-of-network costs may not count toward your in-network out-of-pocket maximum. Staying in-network is one of the most effective ways to control your health care costs.
Choosing the Right Coinsurance Structure
When comparing plans, look at the total cost exposure scenario: add your premium for the year, your deductible, and your maximum possible coinsurance (to your out-of-pocket max). That tells you the worst-case annual cost. A plan with a lower premium but higher coinsurance may cost more if you have a bad health year.