Coinsurance

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Coinsurance

Coinsurance (pronounced koh-in-shur-uhns) is a term used in health insurance to describe the cost-sharing agreement between the insured and the insurer.

Etymology

The term "coinsurance" is derived from the Latin word "con-" meaning "together" and the English word "insurance". It was first used in the early 20th century to describe a type of insurance policy where the risk is shared between the insurer and the insured.

Definition

In a coinsurance agreement, the insured is required to pay a certain percentage of the covered healthcare costs after the deductible has been paid. The insurer will then pay the remaining percentage. For example, if an individual has a coinsurance of 20%, they will pay 20% of the covered healthcare costs after the deductible, and the insurer will pay the remaining 80%.

Related Terms

  • Deductible: The amount that the insured must pay out-of-pocket before the health insurer pays its share.
  • Copayment: A fixed amount the insured pays for a covered healthcare service, usually when the service is received.
  • Out-of-pocket maximum: The most the insured will have to pay for covered services in a policy period. After the insured reaches this amount, the health insurance will pay 100% of the costs of covered benefits.
  • Premium: The amount that must be paid for your health insurance or plan.

See Also

External links

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