Do you know what the word coinsurance means? Not to worry — we’ll tell you. Read on as we explore coinsurance to help you understand its meaning and more.
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Kevin
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April 28, 2022
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Common Questions
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If you’ve ever had health care, you’ve likely come across the term coinsurance — but what exactly does it mean, and how does it work? Is it any different from copay?
You have questions, and we have answers. Read on to discover our complete guide on coinsurance, where you’ll learn our word of the day’s definition, usage, and more.
What Is the Definition of Coinsurance?
If you ask us, one of the best ways to truly understand the meaning of a word is to learn as many definitions and related terms as possible. By studying the various dictionary definitions of our word of the day, coinsurance, you’ll discover its true meaning and the many ways it can be used.
- The Cambridge Dictionary defines coinsurance as a situation in which two or more insurance companies share a risk.
- According to the Collins Dictionary, coinsurance is simply joint insurance by two or more insurers.
- The Oxford English Dictionary says coinsurance is a type of insurance in which the insured pays a share or percentage of the payment made against a claim.
So, what is the meaning of coinsurance, you ask? In short, coinsurance is the amount — generally expressed as a fixed percentage — an insured individual must pay against a claim after the deductible is satisfied. In simpler terms, it’s a joint assumption of risk with another.
How Does Coinsurance Work?
By now, you know that coinsurance is a percentage of a charge you pay after meeting the deductible. So, for example, if you have 20 percent coinsurance, you pay 20 percent of each bill, and your insurance will cover 80 percent.
What Is a Copay?
Many people use coinsurance and copay interchangeably; however, these are two very different words with two very different meanings.
A copay — aka copayment — is a predetermined rate you pay for doctor visits, prescription drugs, and other types of care. On the other hand, coinsurance is the amount or percentage of costs you pay after you’ve met your deductible.
What Is Out-Of-Pocket Maximum?
The out-of-pocket maximum is the most you would have to pay for covered medical expenses in a year. This amount can include a number of things, such as the money you spend on deductibles, coinsurance, and copays.
As soon as you reach your annual out-of-pocket maximum, your health plan will cover the bill on any covered services and prescription costs for the remainder of the year.
How Can You Use Coinsurance in a Sentence?
If you feel comfortable with the word coinsurance, it’s time to put your knowledge to the test and practice using the term in a sentence. To get you going, we’ve provided a few example sentences below:
Only some companies require coinsurance from the people they cover, so be sure to do your research when picking a healthcare plan!
My agent told me that after I meet my deductible, the coinsurance benefits will finally apply.
John said if we go with his insurance company, everything from co-pays to coinsurance percentages will be less.
I know it can be a little pricey, but per your plan, coinsurance charges must be paid before you get any benefits.
I always compare insurance companies by reviewing their coinsurance benefits and deductibles.
To get the coinsurance benefits offered by Becca’s medical plan, she has to pay a high deductible which honestly may make the total cost of the policy not worth it, if you ask me.
Did you know that coinsurance is basically just a form of cost-sharing?
The health insurance plan offered at my work requires a pretty hefty coinsurance charge before I can reap any benefits, so I decided to use a different health care service to cover my annual medical expenses.
Related Words You Should Know
Before we bring this article to an end, we want to leave you with a small homework assignment to help further your understanding of the term coinsurance.
Below, we’ve compiled a word list of related words that are commonly associated with coinsurance. By learning them, you’ll not only deepen your knowledge of our word of the day, coinsurance, but you’ll expand your English vocabulary, too!
Research and learn the following terms:
- Medicare
- Affordable Care Act
- Health insurance policy
- Preventive care
- Pocket maximum
- Premiums
Pro Tip: If you’re not sure where to start, we suggest heading over to Healthcare.gov.
Bottom Line
Coinsurance refers to the percentage of costs of a covered service you pay (30 percent, for example) after you’ve paid your deductible. With coinsurance benefits, you split the costs of services with your insurance provider until you’ve reached your out-of-pocket maximum.
When reviewing your insurance policy, you’ll likely see your coinsurance displayed as a fraction — something like 70/30. In this case, you’re responsible for 30 percent of your expenses and your insurance provider will handle the remaining 70 percent. This is your coinsurance after meeting your deductible.
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