Covered California Certified Enroller Practice Exam

In health insurance, what does coinsurance refer to?

1. A type of insurance fraud

2. A fixed fee for doctor visits

3. A percentage of costs paid after a deductible

4. A monthly fee for maintaining coverage

The correct answer is: A percentage of costs paid after a deductible

Coinsurance is a key concept in health insurance that refers to the percentage of costs that a policyholder is responsible for paying for covered healthcare services after they have met their deductible. For example, if a health plan has a coinsurance rate of 20%, this means that once the deductible is paid, the insurance company will cover 80% of the costs of covered services, while the insured individual will be responsible for the remaining 20%. This arrangement helps to share the financial burden of healthcare expenses between the insurer and the insured. Understanding coinsurance is important for consumers because it impacts out-of-pocket costs for medical services. It is distinct from other terms in health insurance, such as copayments (fixed fees for specific services) and premiums (monthly fees for maintaining coverage). Coinsurance applies primarily to services received after the deductible has already been satisfied, ensuring that insured individuals also contribute to the cost of their care.