What is "coinsurance" in health insurance?

Coinsurance is a cost-sharing arrangement in health insurance where, after a patient has met their deductible, they are responsible for paying a certain percentage of the total healthcare costs for services rendered. For example, if a patient has 20% coinsurance and receives a medical service that costs $1,000, they will pay $200 after meeting their deductible, while the insurance company covers the remaining $800. This percentage is typically specified in the health insurance policy and can vary depending on the plan.

This concept is crucial because it impacts the patient's overall out-of-pocket expenses and encourages more responsible use of healthcare services, as patients are financially invested in the costs of the care they receive. Coinsurance contrasts with a flat fee structure, monthly premiums for insurance, or penalties for late payments, which serve different purposes in the healthcare payment system.