By healthsherpa
If you have health insurance, then you’ve likely heard about coinsurance. But you may not know what this is, and how it relates to your coverage. Simply put, coinsurance is the percentage of a covered health service you will pay for out-of-pocket after having met your deductible. So how does this work? Learn more about understanding the function of coinsurance in your health coverage plan here.
Grab our guide to understanding your health insurance costs to learn about coinsurance, copays, deductibles, and more.
What is coinsurance in a health insurance plan?
Practically every kind of health insurance plan has something known as coinsurance. This is the percentage of a covered health service you will pay for yourself after you have met your deductible.
In other words, until your deductible is met, you will pay the full negotiated rate for a given covered health care cost in full. After your deductible is met, though, you will pay the coinsurance amount on a covered service.
For example, if a given covered health care service is $1000 and your coinsurance is 20%, if you have not met your deductible yet, you will pay the full $1000. After meeting your deductible, though, you will only pay the coinsurance amount, or $200, for this same service.
Every plan must cover a handful of essential health benefits, including preventive care, even before your deductible is met. Grab our guide to the essential health benefits to learn more.
Keep in mind that plans with higher monthly premiums typically have both lower deductibles and lower coinsurance amounts. This means if you are someone who uses a lot of health care services in a given year, you will often get more value out of a plan with higher premiums that allows you to meet a lower deductible faster and then pay less for your care with a smaller coinsurance rate.
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