What is "coinsurance" in the context of health insurance?

What is "coinsurance" in the context of health insurance?

• A. A fixed fee paid after meeting the deductible
• B. A percentage of the costs covered by the insured
• C. The total contributions to the premium
• D. A one-time payment for hospital admission

Answer: (B)

Coinsurance is the arrangement in health insurance where the insured party pays a certain percentage of the costs of covered healthcare services after the deductible has been met. This means that once the individual has fulfilled their deductible obligation, they share the costs of any additional medical expenses with the insurance company. For example, if a health insurance plan includes a coinsurance provision of 20%, this means that the insured would pay 20% of the costs of services while the insurance company would cover the remaining 80%. This arrangement helps both the insurer and the insured manage healthcare expenses and provides an incentive for policyholders to utilize services judiciously. In contrast, the other options represent different aspects of health insurance financing. A fixed fee after meeting a deductible refers to a copayment, not coinsurance. The total contributions to the premium outline the costs paid to the insurance company for coverage but do not describe coinsurance. A one-time payment for hospital admission relates to facility fees or copayments for specific services rather than coinsurance. All these elements are integral to understanding the broader framework of health insurance but are therefore distinct from the concept of coinsurance.

Coinsurance is the arrangement in health insurance where the insured party pays a certain percentage of the costs of covered healthcare services after the deductible has been met. This means that once the individual has fulfilled their deductible obligation, they share the costs of any additional medical expenses with the insurance company.

For example, if a health insurance plan includes a coinsurance provision of 20%, this means that the insured would pay 20% of the costs of services while the insurance company would cover the remaining 80%. This arrangement helps both the insurer and the insured manage healthcare expenses and provides an incentive for policyholders to utilize services judiciously.

In contrast, the other options represent different aspects of health insurance financing. A fixed fee after meeting a deductible refers to a copayment, not coinsurance. The total contributions to the premium outline the costs paid to the insurance company for coverage but do not describe coinsurance. A one-time payment for hospital admission relates to facility fees or copayments for specific services rather than coinsurance. All these elements are integral to understanding the broader framework of health insurance but are therefore distinct from the concept of coinsurance.