What coinsurance is and when you pay it

Coinsurance is the percentage of a medical bill you pay after your insurance company pays its share. Once you have met your deductible, your insurer covers a portion of the cost — often 80 percent — and you pay the rest, usually 20 percent. That 20 percent is your coinsurance.

Coinsurance only kicks in after your deductible is satisfied. If your deductible is $1,500 and you have not yet met it, you pay the full bill until you reach $1,500. After that point, coinsurance splits the remaining cost between you and your plan. It continues for the rest of the calendar year, even after you have paid thousands of dollars, unless your plan has an out-of-pocket maximum that stops it.

The percentage split varies by plan and by type of care. A plan might cover 80 percent of in-network doctor visits but only 60 percent of specialist care or imaging. Your insurance card or plan documents list the coinsurance percentage for each category of service.

Key Takeaways

  • Coinsurance is the percentage of a medical bill you pay after your insurance company pays its portion, and it only applies after you have met your deductible.
  • A typical coinsurance split is 80/20, meaning your insurer pays 80 percent and you pay 20 percent, but the percentage varies by plan and type of service.
  • Coinsurance continues throughout the year until you reach your out-of-pocket maximum, at which point your insurance covers 100 percent of in-network costs.
  • In-network providers have negotiated rates with your insurer, so your coinsurance is calculated on the lower negotiated price, not the full billed amount.

How coinsurance differs from copays and deductibles

A copay is a fixed dollar amount you pay at the time of service — typically $25 for a doctor visit or $50 for an emergency room. It does not change based on the total bill. Coinsurance, by contrast, is a percentage, so your payment grows with the cost of the service. A $200 office visit with 20 percent coinsurance costs you $40; a $2,000 imaging procedure costs you $400.

Your deductible is the total amount you must pay out of pocket before your insurance starts sharing costs at all. Once you have paid your deductible, coinsurance takes over. Some plans combine these: you might have a $1,500 deductible, then pay 20 percent coinsurance on everything after that until you hit your out-of-pocket maximum of $5,000.

Many plans use all three. You pay a $30 copay for a routine doctor visit (copay), then later in the year you have a surgery that costs $10,000. You have already met your deductible, so your insurer pays 80 percent of the negotiated rate and you pay 20 percent coinsurance. That coinsurance payment counts toward your out-of-pocket maximum.

In-network versus out-of-network coinsurance

In-network providers have contracts with your insurance company that set negotiated rates — usually much lower than what they bill uninsured patients. Your coinsurance is calculated on that negotiated rate. If a surgeon's full fee is $5,000 but the negotiated rate is $3,000, and your plan covers 80 percent, you pay 20 percent of $3,000, which is $600.

Out-of-network providers have no contract with your insurer. Your plan may still cover part of the cost, but the coinsurance percentage is often higher — 30 or 40 percent instead of 20 — and it is calculated on the full billed amount or a different reference price. You could end up paying thousands more than you would with an in-network provider for the same procedure.

Some plans do not cover out-of-network care at all except in emergencies. Check your plan documents to see what percentage your insurer covers for out-of-network services and whether there are any restrictions.

How coinsurance counts toward your out-of-pocket maximum

Your out-of-pocket maximum is the most you will pay in a calendar year for in-network care. Once you reach it, your insurance covers 100 percent of in-network costs for the rest of the year. Both your deductible and your coinsurance payments count toward this maximum.

If your out-of-pocket maximum is $5,000, and you have paid $1,500 in deductible and $2,000 in coinsurance so far this year, you have $1,500 left to pay before your insurance covers everything. The next coinsurance bill you receive will be reduced to bring you to exactly $5,000, and anything after that is covered in full.

Out-of-pocket maximums reset on January 1 each year. If you have a major procedure scheduled in December, it may be worth waiting until January to spread the cost across two plan years — though this depends on your health and your plan's rules.

Real-world example of coinsurance in action

Sarah has a health plan with a $1,500 deductible, 80/20 coinsurance, and a $5,000 out-of-pocket maximum. In March, she visits her in-network primary care doctor for a routine checkup. The negotiated rate is $200. She has not met her deductible yet, so she pays the full $200. Her deductible is now $1,300 remaining.

In May, she needs an MRI. The negotiated rate is $1,200. She still has $1,300 of her deductible left, so she pays $1,200 toward it. Her deductible is now fully met, and she has paid $1,400 total out of pocket. The remaining $0 of the MRI cost is split: her insurer pays 80 percent ($0) and she pays 20 percent coinsurance ($0) because the deductible covered the full amount.

In August, she has surgery. The negotiated rate is $8,000. Her deductible is met, so coinsurance applies: her insurer pays 80 percent ($6,400) and she pays 20 percent ($1,600). She has now paid $1,400 (deductible) plus $1,600 (coinsurance) = $3,000 total out of pocket. She has $2,000 remaining before hitting her $5,000 out-of-pocket maximum.

In October, she has a follow-up visit and imaging. The total negotiated cost is $2,500. Her coinsurance would normally be 20 percent ($500), but that would bring her to $3,500 out of pocket. Instead, she pays only $2,000 to reach her $5,000 maximum. For the rest of the year, her insurance covers 100 percent of in-network costs.

When coinsurance does not explore

Some services are covered at 100 percent before you meet your deductible. Many plans cover preventive care — annual physicals, certain screenings, vaccinations — with no coinsurance or copay. Check your plan documents or call your insurer to confirm which services are fully covered.

Coinsurance also does not explore to out-of-pocket costs that are not medical bills: prescription drug copays, dental work, vision care, or mental health services may have their own separate deductibles and coinsurance percentages. A plan might cover medical coinsurance at 80/20 but prescription drugs at 70/30.

If you receive care from an out-of-network provider, coinsurance may not explore in the same way. Some plans do not cover out-of-network care at all, or they cover it at a much lower percentage. Emergency room visits are sometimes an exception — many plans cover emergency out-of-network care at the same rate as in-network.

How to find your coinsurance percentage

Your insurance card usually lists your coinsurance as a percentage or ratio — 80/20, 70/30, or similar. The first number is what your insurer pays; the second is what you pay. If your card does not show it, your plan documents (often called the Summary of Benefits and Coverage or the Evidence of Coverage) will list coinsurance for each type of service.

You can also call the customer service number on your insurance card and ask directly: "What is my coinsurance percentage for in-network doctor visits?" and "What is my coinsurance for in-network surgery?" The answer may differ by service type.

Before a major procedure, ask your provider's billing department for an estimate of the negotiated rate. Then calculate your coinsurance: multiply the negotiated rate by your coinsurance percentage (your share). Add that to any remaining deductible you have not yet met. This gives you a rough idea of what you will owe.

Frequently Asked Questions

Does coinsurance explore before I meet my deductible?

No. You pay the full bill until your deductible is met. Once you have paid your deductible amount, coinsurance takes over and your insurer starts sharing the cost. Both your deductible payments and your coinsurance payments count toward your out-of-pocket maximum.

Why is my coinsurance bill different from what I expected?

Your coinsurance is calculated on the negotiated rate between your provider and your insurer, not the full billed amount. If you saw an out-of-network provider, the coinsurance percentage may also be higher. Check your Explanation of Benefits (EOB) from your insurer to see the negotiated rate and how your coinsurance was calculated.

What happens to my coinsurance if I switch insurance plans mid-year?

Your old plan's out-of-pocket maximum does not carry over to your new plan. You start fresh with a new deductible and a new out-of-pocket maximum under the new plan. Any coinsurance you paid under the old plan counts only toward that plan's maximum.

Can I negotiate my coinsurance percentage with my insurance company?

No. Your coinsurance percentage is set by your plan and cannot be changed mid-year. You can choose a different plan during open enrollment that has a lower coinsurance percentage, but it will cost more in monthly premiums.

Does coinsurance explore to emergency room visits?

Yes, coinsurance applies to emergency room visits just like any other service, though your plan may cover out-of-network emergency care at the same in-network coinsurance rate. Check your plan documents to confirm the coinsurance percentage for emergency care.