Coinsurance

Coinsurance is the amount you are required to pay for medical care after you have met your deductible. It is usually expressed as a percentage of billed charges. For example, if the insurance company pays 80 percent of the claim, you pay 20 percent.

Example:

Johnny has a medical bill that is $25,000.

First he has to meet his entire deductible of $250.

Then he has to pay a coinsurance amount of 20% or the next $5,000 ($1,000).  The insurance company will pay 80% of the next $5,000 ($4,000), and then the carrier will pay 100% up to the plan maximum.

Johnny’s maximum exposure (out of pocket) of the $25,000 medical bill is $1,250 (deductible and coinsurance).

Good thing Johnny had health insurance!