Key takeaways:
After you meet your annual health insurance deductible, you’ll share medical costs with your insurer until the end of the plan year. Your percentage of those costs is called coinsurance.
Your coinsurance may be high (80% to 100%) or low (0% to 20%). Typically, it is less than 50%.
Your coinsurance drops to 0% once you reach your out-of-pocket maximum for the year.
When you’re choosing an insurance plan, one important step is to estimate your medical costs for the following year. In addition to your policy’s monthly premium, you’ll be responsible for coinsurance or a copay for the care you receive. Your copay amounts will be specified in policy documents, so you’ll know what to expect.
Your coinsurance bill, though, can be trickier to calculate. Many factors determine your coinsurance amount. But by understanding how coinsurance works and how it affects your out-of-pocket costs, you can manage your budget with more confidence and ease.
What is coinsurance?
Coinsurance is a way for your insurer to share medical costs with you after you’ve met your deductible. It requires you to pay a portion of your medical costs (such as charges for tests and office visits), while your insurer pays the rest.
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How does coinsurance work?
Your portion of coinsurance is expressed as a percentage. For example, if you have 20% coinsurance (which is common for employer-sponsored health insurance), then you pay 20% of medical costs after meeting your deductible; your insurer pays 80%.
To calculate your financial responsibility, multiply the cost of service by your coinsurance rate.
Here’s an example with 20% coinsurance:
The cost for an office visit is $100.
$100 x 20% = $20
You pay $20.
Your insurer pays $80.
When do you pay coinsurance?
You typically pay coinsurance after meeting your deductible. Here’s an example to illustrate coinsurance in action: Imagine your annual health insurance deductible is $5,000. If you have surgery in March that costs $3,000, you would have to pay that entire amount out of pocket. After that you would still have a $2,000 balance left on your deductible.
Then, suppose you have another procedure in September that costs $4,000. After paying the first $2,000 to satisfy the rest of your deductible, your 20% coinsurance on the remaining $2,000 would be $400, and your insurer would pay $1,600.
Coinsurance vs. copay
Coinsurance and copays both refer to the out-of-pocket expenses you pay for healthcare services, but they are not the same. Coinsurance is a percentage of the cost you’ll pay for a service, and copays are fixed fees for specific healthcare services.
Copay and coinsurance comparison
Copay | Coinsurance | |
|---|---|---|
How much do you pay? | A fixed dollar amount | A percentage of the cost |
Example | $30 per office visit | 20% of the service cost |
When does it apply? | Typically after you meet your deductible, but it depends on your health plan. | Typically after the deductible is met. |
Does it count toward your out-of-pocket maximum? | Generally, yes. | Generally, yes. |
Coinsurance vs. deductible
Your health plan will likely have both a deductible and coinsurance. Your annual deductible is an out-of-pocket dollar amount specified by your health plan. You generally have to pay that amount in full before your insurer begins cost-sharing for covered healthcare services.
Once you’ve met the deductible, your coinsurance will kick in. This is when your insurer will begin paying a percentage of your medical costs (as outlined in your plan) until you reach your out-of-pocket maximum. At the end of the plan year, usually December 31, your deductible will reset.
It is possible to get a zero-deductible health insurance plan. In this case, your plan’s cost-sharing and your coinsurance apply immediately. But those plans often have more expensive premiums. Conversely, if you have a high-deductible healthcare plan, you’ll pay lower premiums.
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Deductible and coinsurance comparison
Deductible | Coinsurance | |
|---|---|---|
What is it? | A set dollar amount you pay | The percentage of the cost you pay |
When does it apply? | Generally before your insurer pays for covered services | Generally after you meet your deductible |
Example | You pay the first $2,000 for covered services. | You pay 20% of the cost of services after the deductible is met. |
How does coinsurance affect out-of-pocket costs?
Coinsurance can amount to significant medical spending, but your expected expenses can be hard to predict. Since coinsurance operates as a percentage — rather than a fixed cost, such as a copay — the dollar amount you owe for your share will change with the total charges on your medical bill.
But that’s not the only reason your coinsurance burden can be unpredictable. There are several other factors at play.
Your coinsurance rate may be the same across the board or may be different depending on the service. For example, your plan may charge you:
20% for a visit to your primary care physician
30% for a specialist
40% for an emergency room visit
15% for medication
Your coinsurance percentage will also vary based on whether your healthcare professional is in your plan’s network. Health plans usually have different rates for in-network and out-of-network healthcare professionals. Your out-of-network coinsurance rate will be higher.
If you use an out-of-network healthcare professional, you may be charged more than your in-network coinsurance. Insurers calculate “usual, customary, and reasonable” (UCR) prices for services in a given location. They pay their share of the coinsurance on the UCR amount, as do you. But if your healthcare professional’s fee is higher than the UCR price, you will probably have to pay 100% of the difference. This is known as balance billing.
All your coinsurance payments count toward your out-of-pocket maximum, which is set by your policy. Once you reach that limit, you stop paying coinsurance, and your health plan covers 100% of in-network services for the rest of the year.
Where you get your health coverage also determines coinsurance costs:
Medicare Part B coinsurance is usually 20% of the Medicare-approved price.
For employer-sponsored health insurance plans, the average coinsurance rates in 2025 were 19% for primary care and for specialty care, according to KFF’s annual survey.
For insurance purchased on Affordable Care Act (ACA) health insurance marketplaces, how you and your plan split costs varies by metal tier. The table below offers a comparison.
ACA plan cost-sharing comparison by metal tier
Metal level | Your coinsurance | Insurer pays |
|---|---|---|
Bronze | 40% | 60% |
Silver | 30% | 70% |
Gold | 20% | 80% |
Platinum | 10% | 90% |
Coinsurance also applies to prescription medications. With private insurance plans, coinsurance percentages vary by prescription medication tier. In Medicare Part D plans, medication prices, copays, and coinsurance rates typically vary by tier.
What are the financial benefits and risks of coinsurance?
Coinsurance benefits and risks
Coinsurance | Financial benefits | Financial risks |
|---|---|---|
High coinsurance | If you’re comfortable paying a larger share of your medical costs, you can lock in lower premiums. If you do have to pay, keep in mind that your coinsurance payments count toward your out-of-pocket maximum. This means higher coinsurance costs could help you hit that limit sooner. | People with chronic health conditions who need multiple medications or hospital stays could find a high coinsurance percentage very costly. Even if your premiums are low, those monthly savings vanish when you have to pay a larger share of bills for costly and frequent medical services. |
Low coinsurance | People who need chronic care, expensive treatments, or pricey medications will have an easier time with low coinsurance. Having your insurer paying a larger share of your costs may help you save money over time, even if your monthly premiums are on the higher side. | Plans with low coinsurance generally have higher premiums. When you have a plan with a low coinsurance rate, your contribution to your medical bills is smaller, so it takes longer to reach the out-of-pocket maximum. |
Frequently asked questions
The answer likely depends on your specific health plan. But typically, copays come at a lower price. A copay can make your costs more predictable since it’s a fixed amount. Meanwhile, coinsurance involves paying a percentage, so the amount you pay increases when the cost of the healthcare service is higher.
Not usually. Coinsurance generally begins after you meet your deductible, so it doesn’t count toward the deductible itself. But coinsurance does typically count toward your out-of-pocket maximum for covered in-network services.
Coinsurance generally kicks in after you’ve met your deductible. From there, you’ll continue to pay your coinsurance percentage for covered services until you reach your plan’s out-of-pocket maximum. Your plan may have different coinsurance for certain services, so check your policy or contact your insurer for details.
The answer likely depends on your specific health plan. But typically, copays come at a lower price. A copay can make your costs more predictable since it’s a fixed amount. Meanwhile, coinsurance involves paying a percentage, so the amount you pay increases when the cost of the healthcare service is higher.
Not usually. Coinsurance generally begins after you meet your deductible, so it doesn’t count toward the deductible itself. But coinsurance does typically count toward your out-of-pocket maximum for covered in-network services.
Coinsurance generally kicks in after you’ve met your deductible. From there, you’ll continue to pay your coinsurance percentage for covered services until you reach your plan’s out-of-pocket maximum. Your plan may have different coinsurance for certain services, so check your policy or contact your insurer for details.
The bottom line
Understanding your health plan’s coinsurance can help you estimate your out-of-pocket medical costs. Low coinsurance will benefit people needing ongoing care; even if premiums are higher, your portion of medical bills will be smaller. High coinsurance typically goes with lower premiums, so people who need only routine care will pay less each month and may not face costly bills at all. But if they need costly care, they owe a share of those larger bills. Once you hit your annual out-of-pocket maximum, you no longer pay coinsurance.
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References
HealthCare.gov. (n.d.). Coinsurance.
HealthCare.gov. (n.d.). Out-of-network coinsurance.
HealthCare.gov. (n.d.). Out-of-pocket maximum/limit.
HealthCare.gov. (n.d.). UCR (usual, customary, and reasonable).
HealthInsurance.org. (n.d.). Balance billing.
Health Markets. (2023). What is coinsurance? Understanding your share of medical costs.
KFF. (2025). 2025 employer health benefits survey.
Medicare.gov. (n.d.). Costs.
