In terms of health insurance, what is coinsurance?

Coinsurance is a cost-sharing mechanism used in health insurance where the insured pays a certain percentage of the total medical expenses after the deductible has been satisfied. This arrangement means that once the policyholder has paid their deductible, they will then share the costs of covered services with the insurer according to a specified ratio. For example, if the coinsurance rate is set at 20%, the insured pays 20% of the covered healthcare costs, while the insurer pays the remaining 80%. This system helps in reducing overutilization of healthcare services, as the insured is still responsible for a portion of the costs, encouraging thoughtful decision-making regarding medical care.

The other options represent different types of cost structures not related to coinsurance. A fixed dollar amount paid for each visit refers to a copayment, while a flat fee paid monthly regardless of use describes a premium. Costs borne solely by the insurance company do not involve any cost-sharing aspect, which distinguishes them from coinsurance entirely.