What is "co-insurance" in health insurance plans?

Co-insurance refers to the arrangement in health insurance where, after the policyholder has met their deductible, they share the costs of covered healthcare services with the insurer, typically expressed as a percentage. For example, if a plan has a co-insurance rate of 20%, the insured pays 20% of the covered medical expenses while the insurance company covers the remaining 80%. This system is designed to promote shared responsibility for healthcare costs and can help manage the utilization of services.

In contrast, the other options describe different concepts within health insurance:

• A flat fee paid for every doctor visit is known as a copayment, which is a fixed amount the insured must pay for specific services, regardless of overall costs.

• The total annual out-of-pocket maximum represents the highest amount the insured will pay in a given year for covered services, after which the insurance plan pays 100% of covered costs for the remainder of that period.

• The amount that exceeds the policy’s limit refers to costs that go beyond what the insurance will cover, which is separate from co-insurance.

Understanding co-insurance is crucial for navigating healthcare expenses and knowing how much one will need to contribute after insurance kicks in.