In the context of health insurance, what does the term 'coinsurance' refer to?

Coinsurance refers to the arrangement where the insured and the insurer share the costs of covered healthcare expenses after the insured has met their deductible. In this system, once the deductible is paid, the insured is responsible for a certain percentage of the costs for services rendered, while the insurer pays the remaining percentage. For instance, if the coinsurance is set at 20%, the insured would pay 20% of the eligible costs, and the insurance company would cover the remaining 80%. This model encourages insured individuals to partake in their healthcare costs, promoting a shared financial responsibility which can help control overutilization of services.

The other definitions provided do not accurately describe coinsurance. The total out-of-pocket limit refers to the maximum amount a policyholder will pay in a given period, not the sharing of costs post-deductible. Premium payments are amounts that the insured pays regularly for coverage, while the fixed amount paid for each service relates to copayments, not coinsurance. Thus, option A is the correct representation of coinsurance in health insurance.