Coinsurance

The percentage of costs for a covered healthcare service that a patient pays after meeting their deductible, with the insurance plan paying the remaining percentage.

Coinsurance is the percentage of the allowed amount that a patient pays for a covered service after they have met their deductible. If a patient's plan has 20% coinsurance, they pay 20% of the allowed amount and the payer pays 80%. Coinsurance is different from a copay, which is a fixed dollar amount. With coinsurance, the patient's cost varies based on the total cost of the service. A $200 office visit with 20% coinsurance means the patient pays $40. A $5,000 procedure with 20% coinsurance means the patient pays $1,000. Most plans have an out-of-pocket maximum that limits total coinsurance and copay payments for the year. Once the patient reaches their out-of-pocket max, the payer covers 100% of covered services for the rest of the plan year. Collecting coinsurance is more complicated than collecting copays because you do not know the exact amount at the time of service. The coinsurance amount is calculated when the payer processes the claim and applies the allowed amount. You see it on the Explanation of Benefits, and then you bill the patient for their share. This creates a collection challenge. Sending a bill two weeks after a visit gets a much lower collection rate than collecting at the time of service. Some practices estimate the patient's coinsurance based on the expected allowed amount and collect an estimated amount upfront, then reconcile after the claim is adjudicated.