How is coinsurance defined in health insurance terms?

Coinsurance in health insurance is defined as a percentage of the costs of covered medical services that the insured is responsible for paying, after the deductible has been met. This arrangement typically means that once an individual has paid their deductible, they share the costs with the insurance company at a predetermined percentage. For example, if a plan has an 80/20 coinsurance arrangement, the insurer would pay 80% of the medical expenses, leaving the policyholder to pay the remaining 20%.

This concept is particularly important because it affects how much a policyholder will pay out-of-pocket during healthcare usage and helps to alleviate the burden on insurance by ensuring that consumers have a shared responsibility for their healthcare expenses. Understanding coinsurance is crucial for policyholders as it directly impacts their financial obligations when receiving medical care.