What is coinsurance in health insurance?

Coinsurance refers to the arrangement in health insurance where the policyholder is responsible for a certain percentage of the costs of covered healthcare services after meeting their deductible. For example, if a health insurance plan has a coinsurance rate of 20%, once the deductible is satisfied, the insurer will cover 80% of the allowed medical expenses, while the policyholder will pay the remaining 20%. This cost-sharing mechanism helps to reduce the insurance company's overall costs while encouraging policyholders to think critically about their healthcare spending.

Understanding coinsurance is important when evaluating health insurance plans, as it impacts how much out-of-pocket expenses a policyholder may incur when accessing medical care. This concept is distinct from other options in the question: premiums relate to the costs of maintaining insurance, non-covered services are not eligible for coverage under a plan, and a fixed fee for doctor visits pertains to copayments, not coinsurance. Thus, acknowledging coinsurance is essential for budgeting healthcare expenses effectively.