In health insurance, what does the term "coinsurance" refer to?

Coinsurance is an essential concept in health insurance that refers to the percentage of covered expenses that the insured is responsible for paying after they have met their deductible. Typically, coinsurance is expressed as a fraction, such as 80/20, where the insurer pays 80% of the covered expenses, and the insured pays the remaining 20%.

This mechanism ensures that both the insurer and the insured share the financial responsibility for healthcare costs, which can encourage the insured to make more informed healthcare decisions and potentially reduce unnecessary healthcare usage. Coinsurance is different from a copayment, which is a fixed fee that the insured pays for services, or the total amount an insurer will pay on a claim, as it varies based on the percentage arrangement after the deductible has been covered. Therefore, the definition provided in the answer is accurate in reflecting the coinsurance structure within health insurance policies.