What Is Coinsurance in Health Insurance?
By Laurel C. Yazzie | Last reviewed: August 2026
If you have ever looked at an Explanation of Benefits and wondered why you still owe money after your deductible is met, coinsurance is the answer. It is one of the most misunderstood parts of how health plans split costs, and getting it wrong leads to real budget surprises. This guide explains what coinsurance in health insurance means, how the math works, and how it connects to the other costs on your plan.
Coinsurance in health insurance is the percentage of covered medical costs you pay after meeting your deductible. For example, with 80/20 coinsurance, your insurer pays 80% and you pay 20% of each covered bill. You continue paying your coinsurance until you reach your plan’s out-of-pocket maximum, at which point your insurer covers 100% of covered costs.
Having worked directly with clients on health insurance plan selection, the most common misconception I encountered was that once the deductible is paid, the plan takes over completely. Coinsurance is the piece that most people do not factor in until a bill arrives.
What Is Coinsurance in Health Insurance?
Coinsurance is your percentage share of covered medical costs after you have met your annual deductible. According to HealthCare.gov, coinsurance is the percentage of the cost of a covered health care service you pay after you have paid your deductible. It differs from a copay because a copay is always a flat dollar amount, while coinsurance is always expressed as a percentage of the total allowed cost for that service.
Coinsurance does not apply from the first dollar you spend. It activates only after you have met your annual deductible. Before that threshold, you generally pay the full allowed amount for covered services. Once you cross it, every subsequent covered bill is split between you and your insurer based on your coinsurance percentage.
- Deductible phase: You pay 100% of covered costs until your annual deductible is met.
- Coinsurance phase: After the deductible, you pay your percentage (for example, 20%) and your insurer pays the rest (80%) for each covered service.
- Out-of-pocket maximum phase: Once your total annual out-of-pocket spending reaches your plan’s cap, your insurer pays 100% of covered in-network costs for the rest of the plan year.
How Coinsurance Works: A Step-by-Step Example
The clearest way to understand coinsurance is to follow a single claim from start to finish. Consider a plan with a $1,500 deductible, 20% coinsurance, and a $6,000 out-of-pocket maximum. The policyholder has already met the deductible and receives a bill for a covered procedure with an allowed cost of $500.
- Deductible is already met. Because the annual deductible has been satisfied, cost-sharing begins immediately on this claim.
- Coinsurance is applied. The insurer pays 80% of the $500 allowed cost ($400). The policyholder pays 20%, which is $100.
- Out-of-pocket total is updated. The $100 paid counts toward the $6,000 annual out-of-pocket maximum.
- Once the cap is reached. When total out-of-pocket spending across the year hits $6,000, the insurer covers 100% of covered in-network costs for the rest of the plan year, regardless of how many more claims arrive.
From a practical standpoint, one large medical event can quickly close the gap to your out-of-pocket maximum. Once that cap is reached, additional covered care costs you nothing for the rest of the plan year.
Coinsurance vs. Copay vs. Deductible
These three terms appear on every plan document, and confusing one for another leads to unexpected bills. The core difference: a deductible is a dollar amount you pay before coverage shares costs, a copay is a fixed fee per visit or service, and coinsurance is a percentage of each covered bill after the deductible. To understand how the flat-fee version works, see what a copay covers and how it differs from a percentage-based charge.
| Term | What It Is | When You Pay It |
|---|---|---|
| Deductible | A fixed dollar amount you pay before your plan shares costs | At the start of each plan year, until the amount is met |
| Copay | A flat fee for a specific visit or service, such as a fixed dollar amount per primary care visit | At the time of service; may apply before or after the deductible depending on your plan |
| Coinsurance | Your percentage share of covered costs (for example, 20%) | After your deductible is met, until you reach your out-of-pocket maximum |
| Out-of-Pocket Maximum | The most you pay for covered care in one plan year | Once reached, your insurer pays 100% of covered in-network costs for the rest of the year |
When Does Coinsurance Stop?
Coinsurance stops when you reach your plan’s annual out-of-pocket maximum. Your deductible payments and coinsurance payments both count toward that cap. Once you hit it, your insurer covers all covered in-network costs through the end of the plan year. For a full breakdown of the payment sequence, including how your deductible feeds into the coinsurance phase, see how your deductible works before coinsurance begins.
What 80/20 Coinsurance Means and Other Common Splits
Plans write coinsurance as a split that adds up to 100%. The first number is the insurer’s share; the second is yours. The most common arrangement in employer-sponsored and Marketplace plans is 80/20, meaning the insurer pays 80% of each covered bill after the deductible and you pay 20%. Other splits such as 70/30 and 60/40 leave you responsible for a larger share of each bill, but often come with lower monthly premiums.
| Coinsurance Split | Insurer Pays | You Pay | General Premium Pattern |
|---|---|---|---|
| 90/10 | 90% | 10% | Higher monthly premium |
| 80/20 | 80% | 20% | Moderate monthly premium |
| 70/30 | 70% | 30% | Lower monthly premium |
| 60/40 | 60% | 40% | Lower monthly premium |
The general premium pattern in the table above is consistent with the guidance on HealthCare.gov: plans with lower monthly premiums generally carry higher coinsurance, and plans with higher monthly premiums generally carry lower coinsurance. Your specific premium will also depend on your age, location, plan tier, and any employer contribution.
What Happens When You See an Out-of-Network Provider?
Out-of-network coinsurance is where many people get a much larger bill than they expected, and the reason goes beyond the percentage itself. When you use an out-of-network provider on a plan that allows it (such as a PPO), two things often change at once. First, a separate and higher out-of-network deductible usually applies. Second, your coinsurance rate for out-of-network services is typically higher than your in-network rate, sometimes 40% or 50% instead of 20%.
A third factor makes this even more costly: out-of-network providers are not bound by your insurer’s negotiated rates. Your insurer calculates your coinsurance based on what it considers the “allowed amount” for that service in your area. If the provider charges more than that allowed amount, the difference, known as balance billing, falls entirely on you and does not count toward your out-of-pocket maximum. On an HMO or EPO plan, out-of-network care is generally not covered at all outside a genuine medical emergency. Confirming that your provider is in-network before any scheduled procedure is the most direct way to avoid this risk.
How to Choose the Right Coinsurance Rate for Your Plan
What most people miss when comparing plan options is that coinsurance and premium are a direct trade-off. A plan with low coinsurance (you pay 10%) costs more each month. A plan with high coinsurance (you pay 30% or 40%) costs less each month but exposes you to a larger share of costs if you need significant care. Neither is automatically better.
Use this decision framework at open enrollment:
- If you rarely need care beyond annual preventive visits: a higher coinsurance plan with a lower premium often costs less over the full year, since you rarely reach the coinsurance phase at all.
- If you have a chronic condition, regular prescriptions, or a planned procedure: lower coinsurance reduces your share of each bill and can lower your total annual spending significantly, even with the higher premium.
- If you are unsure: estimate your expected visits and costs under each plan option, then add annual premium cost to your estimated coinsurance bills. Compare the totals, not just the monthly payment.
To find your coinsurance rate, look at your plan’s Summary of Benefits and Coverage (SBC). Every ACA-compliant plan is required to provide this document, and it lists your coinsurance percentage for each category of service, including hospital stays, specialist visits, lab work, and imaging. The National Association of Insurance Commissioners also recommends checking your member portal or calling the number on your insurance card to confirm your current cost-sharing details. For a full overview of how all your plan costs fit together, visit the health insurance resource center.
FAQ: Coinsurance in Health Insurance
Tap any question to expand the answer.
Does coinsurance apply to every service, or just some?
Coinsurance does not apply to every service. Under ACA-compliant plans, a specific list of preventive services, including annual physicals and recommended vaccines, must be provided at no cost to you before your deductible is met, with no coinsurance charge. Coinsurance applies to non-preventive covered services after you have satisfied your annual deductible. Some plans also use flat copays instead of coinsurance for certain services such as primary care visits, so it is important to review your plan’s Summary of Benefits and Coverage for the exact rules that apply to each service category.
Does coinsurance count toward my out-of-pocket maximum?
Yes. Every dollar you pay as coinsurance on covered in-network services counts toward your annual out-of-pocket maximum. Your deductible payments also count. Once the combined total of your deductible, copays, and coinsurance payments reaches the out-of-pocket maximum, your insurer pays 100% of covered in-network costs for the rest of the plan year. Note that coinsurance on out-of-network services may count toward a separate out-of-pocket maximum, and balance-billed amounts above your insurer’s allowed rate do not count toward either cap.
Can I have both a copay and coinsurance for the same visit?
It depends on how your specific plan is structured. Some plans use copays for certain service types (such as primary care or specialist visits) and coinsurance for others (such as hospital stays or imaging). Other plans apply coinsurance to most services after the deductible, with no separate copay. A small number of plans apply both a copay and coinsurance to the same visit. Your plan’s Summary of Benefits and Coverage document will specify exactly which cost-sharing method applies to each service category, and reviewing it before your visit is the best way to know what to expect.
Is coinsurance calculated on the full billed amount or the insurer’s allowed amount?
Coinsurance is calculated on your insurer’s allowed amount for the service, not the provider’s full billed charge. The allowed amount is the negotiated rate your insurer has agreed to pay in-network providers. If your provider is in-network, the billed amount is reduced to this negotiated rate before coinsurance is applied, which means your share is based on a lower number than what appeared on the initial bill. If your provider is out-of-network, the insurer still calculates coinsurance based on its determined allowed amount for your area, and any charge above that allowed amount may be billed to you separately as balance billing.
What does 0% coinsurance mean on a health plan?
A plan with 0% coinsurance means your insurer pays 100% of the allowed cost for covered services once you have met your deductible. You owe nothing beyond the deductible itself for those covered services. Plans with 0% coinsurance are common in Platinum-tier ACA Marketplace plans and some employer-sponsored options. The trade-off is a higher monthly premium. Whether a 0% coinsurance plan saves money overall depends on how much care you expect to use during the year compared to the extra premium cost.
