Which statement best describes coinsurance?

Prepare for the Business of Healthcare and Health Policy Test. Study with multiple choice questions and explanations to ace your exam!

Multiple Choice

Which statement best describes coinsurance?

Coinsurance is the share of covered costs you pay after you’ve met your deductible, expressed as a percentage. That’s why describing it as a percentage of costs shared between the insurer and the insured best fits the concept. In practice, you might pay, for example, 20% of the allowed charges after the deductible is met, with the insurer paying the remaining 80%, up until you reach the annual out-of-pocket limit. The other ideas mix in different cost-sharing elements: a monthly fee for coverage is the premium, a fixed amount per visit is a copayment, and the total annual out-of-pocket limit is the cap on what you pay in a year (not the ongoing share during visits).

Coinsurance is the share of covered costs you pay after you’ve met your deductible, expressed as a percentage. That’s why describing it as a percentage of costs shared between the insurer and the insured best fits the concept. In practice, you might pay, for example, 20% of the allowed charges after the deductible is met, with the insurer paying the remaining 80%, up until you reach the annual out-of-pocket limit.

The other ideas mix in different cost-sharing elements: a monthly fee for coverage is the premium, a fixed amount per visit is a copayment, and the total annual out-of-pocket limit is the cap on what you pay in a year (not the ongoing share during visits).

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