Co-Insurance is the percentage of healthcare costs that a policyholder must pay after meeting their deductible. It represents the cost-sharing agreement between the insured individual and the insurance company, helping to distribute medical expenses. Unlike a copayment (a fixed amount per visit), co-insurance is a percentage of the total allowed amount for a service.
For example, if a health plan has an 80/20 co-insurance, the insurance company covers 80% of the cost, and the patient is responsible for 20% after paying their deductible. If a procedure costs $1,000, and the deductible has been met, the insurance pays $800, while the patient pays $200.
Co-insurance applies until the policyholder reaches their out-of-pocket maximum, after which the insurance covers 100% of covered expenses for the rest of the plan year. Different services, such as specialist visits, hospital stays, or prescription drugs, may have varying co-insurance rates.
Understanding co-insurance is crucial for managing healthcare expenses. Policyholders should review their Explanation of Benefits (EOB) and insurance plan details to estimate potential costs and avoid unexpected medical bills.