Co-insurance is a policy provision under which you and the insurance company must bear a fixed sum of loss in case of a claim after the deductible is met. In other words, The simplest way to understand co-insurance is to think of a situation where you split the cost of covered expenses with your insurance company. While this may not sound like a good deal on your part, it’s important to understand that the split is almost never even. Instead, most coinsurance plans features an 80/20, 70/30 or even 90/10 split. If you have a coinsurance plan that has a 80/20 split, your insurance company will pay for eighty percent of the costs associated with a covered expense, while you will pay for the other twenty percent. Remember as your portion of the co-insurance increases, your monthly premium will drop. Thus a 50/50 plan will be less expensive than an 80/20 plan.
Lets have a glance of the terms which usually interchanged with Co-insurance as people consider these as synonymous. Firstly Co-insurance is not “co-pay.” Co-pay is the service fee you pay to the doctor in the USA every time you visit. Secondly Co-insurance is not “deductible.” It is the amount that you initially need to pay to your insurer before your health and medical benefits can ever take effect. Only after payment of the deductible will your insurer company assists you with your medical expenses. “Co-insurance” is called “Co” because it includes a sharing of medical costs between the client and the insurance company.