What Is Coinsurance? A Plain-Language Guide

Coinsurance is the percentage of a covered service you pay after your deductible. Learn how it works, how it differs from a copay, and what it means for bills.

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Health insurance rarely pays the whole bill from the first dollar. Instead, you and your plan share costs in a few different ways, and coinsurance is one of the most common. Coinsurance is a percentage of the cost of a covered service that you pay, after you have met your deductible. If your plan says 20 percent coinsurance for a service, that means you pay 20 percent of the allowed cost and your plan pays the rest. This guide explains how coinsurance works, how it differs from a copay and a deductible, and what to check in your own plan.

The Basic Idea

Think of coinsurance as splitting the bill by percentage. Your plan negotiates an allowed amount for each covered service. Once your deductible is met, you pay your percentage of that allowed amount for each service until your spending reaches your out-of-pocket maximum. After that point, your plan pays the full allowed cost of covered services for the rest of the plan year.

Coinsurance percentages vary by plan and by type of service. A plan might use one percentage for primary care, another for specialists, and another for hospital care or prescriptions. The exact percentages in your plan are listed in its summary of benefits, and they only apply to covered services from providers your plan counts as in-network, unless your plan also covers out-of-network care.

How Coinsurance Fits With the Deductible

The deductible comes first. Until you have paid your deductible for the year, you generally pay the full allowed cost of most covered services yourself. Coinsurance starts after the deductible is met. If you are still building the basics, what a health insurance deductible is explains that first stage in plain language.

There is one common exception: many plans cover certain preventive services and some office visits with a simple copay, or at no cost to you, before the deductible. Whether a visit uses a copay or counts toward the deductible depends on your plan's design, so the summary of benefits is the document to trust for your specific coverage.

Coinsurance vs. Copay

A copay is a flat amount you pay for a service, such as a set fee for a doctor visit or a prescription. Coinsurance is a percentage, so the amount you owe depends on the cost of the service. A flat copay is predictable; coinsurance is not, because a more expensive service means a larger share for you. What a health insurance copay is covers the flat-fee side of cost sharing.

Some plans use copays for routine care and coinsurance for larger services like hospital stays, surgery, or imaging. Knowing which one applies before a planned procedure helps you estimate your share in advance instead of being surprised by the bill afterward.

What Counts Toward Your Out-of-Pocket Maximum

Coinsurance payments count toward your out-of-pocket maximum, along with your deductible spending and most copays for covered services. Your premiums do not count, and neither do amounts you pay for services your plan does not cover. How the ceiling works is covered in what an out-of-pocket maximum is.

This is why coinsurance matters most in a year with serious medical needs. Early in the year you may pay the full cost until the deductible is met, then a percentage of each bill, but the maximum puts a ceiling on your total share for covered, in-network care during that plan year.

A Simple Example

Suppose a covered service has an allowed amount of 1,000 dollars, you have already met your deductible, and your coinsurance is 20 percent. You pay 200 dollars and your plan pays 800 dollars. If you had not met your deductible yet, you would generally pay the full allowed amount, and it would count toward your deductible. The percentages and amounts in your own plan will differ — this example only shows the mechanics, not any particular plan's terms.

Questions to Ask About Your Plan

• What is my coinsurance percentage for primary care, specialists, hospital care, and prescriptions?
• Have I met my deductible yet this year, and how much of my out-of-pocket maximum have I reached?
• Is this provider in my plan's network, and is the service covered?
• For a planned procedure, what is the allowed amount, so I can estimate my share?

Frequently Asked Questions

Does coinsurance apply before I meet my deductible?

Generally no. For most covered services, you pay the full allowed cost until your deductible is met, and coinsurance applies after that. Some services, such as certain preventive care, may be covered differently. Check your plan's summary of benefits.

Is coinsurance the same as a copay?

No. A copay is a flat amount per service. Coinsurance is a percentage of the allowed cost, so what you owe rises with the price of the service. Many plans use both, for different kinds of care.

Does coinsurance count toward my out-of-pocket maximum?

Yes. Amounts you pay as coinsurance for covered services count toward your out-of-pocket maximum, along with deductible spending and most copays. Premiums and non-covered services do not count.

Why did I receive a bill after I paid at the office?

What you pay at the time of a visit is often an estimate or a copay. After the visit, the provider bills the plan, the plan applies your deductible and coinsurance, and any remaining share is billed to you. The explanation of benefits you receive shows how the claim was processed.

Where do I find my coinsurance percentages?

They are listed in your plan's summary of benefits and coverage, which your plan provides at enrollment and on request. If the document is unclear, call the member number on your insurance card and ask for the percentages by service type.

Want help reading your own plan's cost sharing in plain language? Request a quote review and bring your summary of benefits — we will walk through what the percentages mean for your family.

This content is educational information about how insurance terms generally work. It is not a quote, a rate, or a guarantee of coverage. Your own plan's documents control what it covers and what you pay.