Insurance Alphabet: Letter C

C is for:

“COINSURANCE”

Coinsurance (or co-insurance): is the percentage of covered expenses under a major medical plan that will be paid once the deductible is satisfied.

Said another way, it’s the portion of the bill that the policyholder is responsible for, once the deductible has been met. 

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Example:

Plan Type: PPO

Co-Payment: $30 primary care, $50 specialist

Deductible: $3000

Coinsurance: 70%/30%

Annual out of Pocket Maximum: $5000

Based on the example above, once the $3000 deductible has been paid, the policyholder is then responsible for 30% of covered expenses (the coinsurance) up to $5000 (the out of pocket maximum). The insurance company pays the remaining covered expenses.

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In many cases, the use of coinsurance is most common with a hospital stay. However, in some cases (depending on the structure of the insurance contract you have in place), there may be coinsurance for outpatient surgeries, basic physician services, primary care, etc.

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