Coinsurance Explained: What You Pay After Your Deductible

Coinsurance is the percentage of a covered medical bill you pay, usually after you've met your deductible. If your coinsurance is 20%, you generally pay $20 for every $100 of the plan's allowed cost, while your insurer pays the rest.

Your share can continue until you reach your out-of-pocket maximum . Understanding how those amounts work together can help you compare health insurance plans and anticipate what a bill might cost.

How coinsurance works after your deductible

Your deductible is the amount you pay for many covered services before your plan begins sharing their cost. Once you've met it, coinsurance may apply to services such as a hospital stay or outpatient procedure.

For example, a plan with 20% coinsurance generally pays 80% of the allowed cost for a covered service after the deductible. You pay the other 20%, subject to the plan's out-of-pocket limit. HealthCare.gov describes this percentage split in its coinsurance glossary.

The percentage is typically calculated on the allowed amount , not necessarily the provider's original charge. For an in-network service, the allowed amount is generally the rate negotiated between the plan and provider.

Coinsurance doesn't apply to every service in the same way. Some benefits may have a fixed copay instead, and some can be covered before you meet the deductible. The plan's benefit details determine which cost applies.

A coinsurance example with a medical bill

Consider a plan with a $3,000 deductible, 20% coinsurance, and a $6,850 out-of-pocket maximum. These are example amounts, not standard plan terms.

Suppose you've paid a $30 copay for a covered in-network office visit. In this example, the copay counts toward your out-of-pocket maximum but doesn't reduce your deductible. You then receive a covered medical service with a $5,000 allowed amount.

The bill breaks down this way:

Your share of this service is $3,400 . Adding the earlier $30 copay brings your total qualifying out-of-pocket spending to $3,430.

That leaves $3,420 before you reach the $6,850 maximum. If you later receive another covered in-network service with a $20,000 allowed amount and the same coinsurance rate, your share would ordinarily be $4,000. However, you would pay $3,420 because that reaches your maximum. The plan would pay the remaining $16,580.

For the rest of that plan year, the plan would pay 100% of the allowed cost for covered in-network services. Premiums and costs outside the plan's covered benefits are separate.

Coinsurance, deductibles, copays, and maximums

These terms describe different parts of your medical costs. You may encounter more than one during the same plan year.

Deductible and coinsurance

A deductible is a dollar amount. Coinsurance is a percentage of a covered service's allowed cost.

With a $3,000 deductible, you generally pay the first $3,000 for services subject to it. Afterward, a 20% coinsurance rate would leave you responsible for $100 of a $500 allowed charge. Our explanation of how health insurance deductibles work covers the first part of that calculation in more detail.

Meeting your deductible doesn't mean all subsequent care is free. Coinsurance and copays can continue until you reach the applicable out-of-pocket maximum.

Copay and out-of-pocket maximum

A copay is a fixed amount, such as $30 for an office visit under the example plan. A plan may charge a copay before or after the deductible, depending on the benefit.

The out-of-pocket maximum is a limit on eligible cost-sharing during the plan year. Deductible payments, copays, and coinsurance for covered in-network care generally count toward it. Once you reach the limit, the plan pays 100% of the allowed cost for covered in-network services for the rest of that plan year.

What the out-of-pocket maximum doesn't include

The maximum gives you a useful way to budget for a year with substantial covered care. It doesn't cap every dollar you might spend on health care.

Premiums are separate

Your premium is the amount you pay to keep your coverage, usually each month. It doesn't count toward your deductible or out-of-pocket maximum.

That means your annual cost can include both premiums and medical cost-sharing. Our guide to health insurance premiums versus cost-sharing explains how the two fit together.

Some bills fall outside the limit

Charges for services your plan doesn't cover generally don't count toward the maximum. Out-of-network expenses may also have different rules or a separate limit. The HealthCare.gov guide to out-of-pocket limits explains which costs are excluded.

Family coverage can add another layer. A plan may have individual and family deductibles or limits, so one person's spending and the household's combined spending can affect when the plan pays more.

Why the provider's network matters

A coinsurance percentage tells you only part of the price. The allowed amount and whether the provider participates in your plan's network matter, too.

In-network care and allowed amounts

In-network providers agree to a contracted rate for covered services. If a provider charges more than that rate, your percentage is generally based on the allowed amount. The provider typically writes off the difference for covered in-network care.

For instance, if the charge is $500 and the allowed amount is $300, 20% coinsurance after the deductible is $60. The original $500 charge isn't the amount used for that calculation.

Out-of-network care

Out-of-network services can cost more, and some plans don't cover them except in certain circumstances. If coverage applies, a separate deductible or a higher coinsurance rate may apply.

A provider may also bill you for the difference between their charge and the amount the plan allows, although federal and state protections restrict certain surprise bills. Amounts outside your covered benefits won't necessarily count toward your in-network maximum.

Plan type affects network choices. A PPO often covers some out-of-network care at a higher cost, while an HMO generally limits coverage to its network apart from exceptions such as emergencies. The actual benefits depend on the plan.

How to compare coinsurance when choosing a plan

A lower percentage can reduce your share of a large covered bill, but it doesn't tell you what you'll pay over a full year. Compare it with the deductible, premium, and out-of-pocket maximum.

Look at the whole year's cost

Start with 12 months of premiums. Then consider the care you expect to use and the cost-sharing that applies to it. For a year with more medical expenses, add the in-network out-of-pocket maximum to annual premiums to understand the plan's potential cost for covered in-network care.

A plan with a lower premium may have higher cost-sharing, while a plan with a higher premium may leave you paying less when you receive care. That tradeoff varies by plan. HealthCare.gov's guide to total health care costs shows why the monthly premium is only one part of the calculation.

Compare the benefits you'll use

Coinsurance rates can differ by service. A plan might list one cost for specialist visits and another for outpatient surgery or prescription drugs. Some plans also have a separate prescription deductible.

The Summary of Benefits and Coverage presents common benefits and cost-sharing terms in a standard format. Comparing those documents side by side can show whether your expected care has a copay, coinsurance, or another charge.

For Marketplace coverage, eligible households can receive cost-sharing reductions with a Silver plan. Those reductions can lower deductibles, copays, coinsurance, and out-of-pocket limits. Our guide to Florida ACA Marketplace plans covers plan tiers and available savings.

Read your explanation of benefits before paying

After a claim is processed, your insurer typically sends an explanation of benefits, often called an EOB. It's not a bill. It shows the provider's charge, the allowed amount, what the plan paid, and your potential share.

The provider's bill should reflect the claim's processing. If the amounts don't line up, the EOB can help you identify whether the difference involves a deductible payment, coinsurance, or another charge.

Keep in mind that claims may be processed in a different order than you received care. That order can affect which claim uses up the remaining deductible and which one receives the coinsurance split.

Key takeaways

Coinsurance is your percentage share of an eligible medical cost, usually after the deductible. A copay is a fixed charge, while the out-of-pocket maximum limits eligible in-network cost-sharing for the plan year.

Your premium remains separate. To compare plans, look at the percentage alongside the deductible, network, and maximum.

Frequently asked questions

Does coinsurance apply before the deductible?

Usually, you pay the allowed cost for services subject to the deductible until you've met it. Some benefits have different terms, such as a copay before the deductible. Certain covered preventive services may also be available without cost-sharing when you use an in-network provider.

Does 20% coinsurance mean I pay 20% of every bill?

No. The percentage applies to covered services when the plan's terms call for it, typically after the deductible. Some services have copays or different rates, while services outside the plan's coverage can leave you responsible for more.

Do copays count toward the out-of-pocket maximum?

Copays for covered in-network services generally count toward the maximum. They don't always count toward the deductible, as the office visit in the example shows.

Does coinsurance start over each year?

Deductible and out-of-pocket spending generally reset when a new plan year begins. After that reset, you may need to meet the new year's deductible before coinsurance applies to services subject to it.

Putting your share in perspective

Coinsurance tells you how a covered bill is divided after you've met the deductible. The dollar amount depends on the service's allowed cost and your plan's terms.

For a fuller picture, consider the deductible and out-of-pocket maximum alongside that percentage. Together, they show how your share can change as medical costs add up during the plan year.