What is referred to by "coinsurance"?

Coinsurance is a term used in health insurance that describes the percentage of costs an insured individual must pay for covered healthcare services after they have met their deductible. This means that once the insured has paid the deductible—a set amount they must pay out of pocket for their healthcare costs—coinsurance comes into play. For instance, if an individual has a coinsurance rate of 20%, they would then be responsible for paying 20% of the costs of services received, while the insurance company would cover the remaining 80%.

This concept is crucial to understand, as it directly affects the individual's out-of-pocket expenses for healthcare services and indicates shared financial responsibility between the insured and the insurer for covered services. The other options do not accurately describe coinsurance. The total out-of-pocket costs encompass more than just coinsurance; it includes deductibles, coinsurance, and copayments. A fixed cost for any health service typically refers to copayments, not coinsurance. Lastly, the maximum amount a health plan will pay for a service relates to limits or caps within a policy, rather than how costs are shared after a deductible.