Coinsurance

Coinsurance is the percentage of the allowable expense borne by a member. The remaining percentage of the allowable expense is borne by the insurer.

Coinsurance is, typically, referenced as the ratio of the percentage of expenses borne by the insurer and the member. For example, if coinsurance for a plan is 80:20, this means that 80% of the expenses will be paid by the insurer whereas 20% will be paid by the member.

The coinsurance amount varies across health insurance plans. There are several types of coinsurance amounts that can be applied depending on the type of health insurance plan and the provider.

Type of Provider	Member %	Insurer %
In-network physician	20%	80%
Out-of-network physician	40%	60%
In-network hospital	10%	90%
Out-of-network hospital	30%	70%

 A member always pays the smaller share and the larger share is paid by the insurer. Additionally, coinsurance is applicable on every service that is mentioned in a plan.

Exercise of coinsurance Question: Sally is hospitalized for an injury. Sally has an 80:20 coinsurance plan. The hospital stay costs $1,000. What will Sally pay in this case?