How Coinsurance Works in Your Health Insurance Policy

Coinsurance and Your Out-of-Pocket Costs

A doctor and her patient talk.

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Coinsurance, a term found in every health insurance policy, is your out-of-pocket expense for a covered medical or healthcare cost after the deductible, which generally renews annually, has been paid on your healthcare plan.

Generally expressed as a percentage amount and outlined in your policy documents, coinsurance allows you to share the cost of the insured service with the insurance company—your insurance company pays the portion of the cost of the service that is insured, and you pay the remainder.

Key Takeaways

  • Coinsurance is your out-of-pocket expense for a covered cost after you have paid the deductible on your healthcare plan.
  • The insurance company generally pays a greater percentage of any medically necessary healthcare service, and you pay the rest.
  • If you have two health insurance plans, and one has a different coinsurance clause, you may be able to coordinate benefits to cover more of the cost.
  • Once you meet your annual deductible, you will only be responsible for the coinsurance amount listed in your policy.

Coinsurance Percentage Breakdown

Coinsurance amounts typically aren't split evenly between you and your insurer. The insurance company generally bears a higher burden, paying the majority of the covered cost (the greater percentage) of a covered healthcare service. The first number in a coinsurance split is what your insurer pays and the second number is what you pay. Coinsurance is typically applied to the insurer's allowed amount for a covered health care service, which is the maximum amount the plan will pay for that expense.

Common coinsurance divisions are 70/30 or 80/20—your insurance company would pay either 70% or 80%, and you would pay the remaining 20% or 30%, respectively, out of pocket, after the deductible is met.


Health insurance plans purchased through the Health Insurance Marketplace have coinsurance splits ranging from 60%/40% to 90%/10%.

Say you met your deductible in the spring and, in the fall, you break a finger and go to the emergency room. Your bill is $2,000 (within the allowed amount), and your coinsurance is 80%/20%, which means you're responsible for 20% of the bill. You'll pay $400.

That $400 is known as your "out-of-pocket" expense. The insurance company, paying the majority of the cost at the higher percentage, would pay the remaining $1,600.

Coinsurance When You Have Coverage From Two Plans

If you are fortunate enough to have coverage under two health insurance plans (for example, under a spouse or domestic partner plan), one plan generally acts as the primary plan when filing your health insurance claim. In most cases, the primary plan's coinsurance will apply to your expenses first, and the secondary plan's coinsurance usually applies to anything your primary plan hasn't paid for. The process of using two insurance plans to cover a cost is called "coordination of benefits."

It's important to note that those enrolled in Medicare may want to check with their providers and coverages first, as the coordination of benefits may be different across different scenarios and to ensure your bills are sent to the right payers, in the right order.


Policy deductibles renew annually, which means they start over. So, if you meet your $500 deductible in June and your policy renews in July, then your deductible starts over and, typically, you have to pay $500 out of pocket before your coinsurance kicks in again.

The Bottom Line

Understanding how coinsurance, coordination of benefits, and deductibles work on your health plan can save money each year. It's important to fully read all conditions of a policy before you make your choice or sign a waiver of health insurance, for any policy. If you have questions, speak to your representative to fully understand your options.

Frequently Asked Questions (FAQs)

What does 80% coinsurance mean?

Typically, 80% coinsurance means that, once you meet your deductible, your insurer is responsible for 80% of covered medical bills and you're responsible for 20%. If you have a $2,000 bill and you've met your deductible, 80% coinsurance means your insurer would pay $1,000 and you'd pay $400.

Is it better to have higher or lower coinsurance?

It's better for you to have lower coinsurance because that means you'll be responsible for a lower percentage of your covered medical bills.

Is coinsurance good or bad?

Coinsurance is a good thing to have because it makes you responsible for a fraction of a covered medical bill instead of the entire amount. That being said, coinsurance amounts vary, with 20% and 30% being common.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. "Coinsurance."

  2. "The Health Plan Categories: Bronze, Silver, Gold, and Platinum."

  3. FAIR Health Consumer. "Having More Than One Health Plan."

  4. Government of the District of Columbia. "Understanding Your Health Insurance," Page 2.

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