Coinsurance Percentage

Definition - What does Coinsurance Percentage mean?

Coinsurance percentage refers to the amount that either the insured or the insurer pays for a service. The system of coinsurance is represented by a percentage, where paying is concerned, with the insurer taking on the bigger percentage and the insured taking on the lower one. This is effective only when the insured has paid the deductible in full.

Insuranceopedia explains Coinsurance Percentage

In insurance, the deductible must be fully paid before an insured enjoys his or her insurance benefits. When the insured gets sick and goes to a hospital, he or she pays all the medical bills out of their own money if they have not completed payment for deductible.

When the insured pays the deductible, that's when the insured provides coverage. Payments for services are split between the insured and the insurer using the coinsurance percentage system. The higher of a percentage that is paid by the insurer, the lower percentage is paid by the insured.

For instance, Clara is given a bill of $1,000 after a medical treatment. The coinsurance percentage is 80/20. With the deductible fully paid, Clara would pay out $200 and the insurer would pay $800.

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