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 a cost-sharing arrangement where, after any deductible is met, you pay a percentage of covered medical costs and the insurer pays the rest. It’s a percentage split, not a fixed amount per visit and not the monthly premium. It’s also not the total annual out-of-pocket limit itself, though your coinsurance payments count toward that limit. A common example is 80/20, meaning you cover 20% of the allowed costs for covered services and the insurer covers 80%, up to the plan’s rules. For instance, a $1,000 bill with 20% coinsurance would leave you responsible for $200 and the insurer paying $800, assuming the service is covered and the deductible (if any) has been met. Coinsurance generally contributes toward the out-of-pocket maximum, and once that maximum is reached, the plan pays 100% of covered costs for the rest of the year.

Coinsurance is a cost-sharing arrangement where, after any deductible is met, you pay a percentage of covered medical costs and the insurer pays the rest. It’s a percentage split, not a fixed amount per visit and not the monthly premium. It’s also not the total annual out-of-pocket limit itself, though your coinsurance payments count toward that limit.

A common example is 80/20, meaning you cover 20% of the allowed costs for covered services and the insurer covers 80%, up to the plan’s rules. For instance, a $1,000 bill with 20% coinsurance would leave you responsible for $200 and the insurer paying $800, assuming the service is covered and the deductible (if any) has been met. Coinsurance generally contributes toward the out-of-pocket maximum, and once that maximum is reached, the plan pays 100% of covered costs for the rest of the year.

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