What describes coinsurance?

What describes coinsurance?

• A. An amount a policy holder is responsible for according to their insurance policy.
• B. The fixed fee paid for a specific medical service.
• C. The annual maximum coverage limit.
• D. The total annual premium.

Answer: (A)

Coinsurance is the portion of the cost of covered services that you pay after you’ve met your deductible. It’s typically a percentage, such as 20%, of the allowed amount for the service, with the insurer paying the remaining 80%. This describes the policyholder’s share of costs, rather than a fixed fee per visit (copay), the annual maximum, or the premium. For example, with 20% coinsurance on a $1,000 covered bill after deductible, you’d owe $200 and the insurer would pay $800. Coinsurance helps explain why your out-of-pocket costs change with the total bill and service type, and it may count toward your out-of-pocket maximum.

Coinsurance is the portion of the cost of covered services that you pay after you’ve met your deductible. It’s typically a percentage, such as 20%, of the allowed amount for the service, with the insurer paying the remaining 80%. This describes the policyholder’s share of costs, rather than a fixed fee per visit (copay), the annual maximum, or the premium. For example, with 20% coinsurance on a $1,000 covered bill after deductible, you’d owe $200 and the insurer would pay $800. Coinsurance helps explain why your out-of-pocket costs change with the total bill and service type, and it may count toward your out-of-pocket maximum.