What is Medical Coinsurance?

Medical coinsurance is the amount of risk that is retained by the insurer. It is the insurer’s portion of payment to pay when they become ill or injured. A co-insurance requirement helps reduce an insurance company’s loss exposure and lower insurance costs for the insured.

What is Medical Co-Insurance?

Typically, after a deductible or “first-dollar” amount is paid by the insured, a split in the cost of coverage is put in place. This split is known as the co-pay or co-insurance amount and is used to guide behavior.  A health insurance company may pay more of a percentage split if the insured uses doctors and other health care providers that are part of a provider network.  They may also pay a lower amount in terms of co-insurance for procedures that may not be medically urgent.

Typical Medical Co-Insurance Splits

The typical co-insurance split for most medical expenses is 80 percent paid by the insurer and 20 percent paid by the insured.  For certain procedures this amount can be 70/30 or even 60/40, depending on the type of medical procedure.  Medical co-insurance requirements are used by health insurance companies to influence behavior and lower costs for all policyholders.