What is typically the structure of coinsurance in health insurance?

Coinsurance in health insurance typically involves a percentage participation structure, meaning that after meeting a specified deductible, the insured shares a portion of the costs of covered healthcare services with the insurance company. For example, if a health plan has an 80/20 coinsurance provision, the insurer pays 80% of the covered medical expenses, while the insured is responsible for the remaining 20%. This arrangement encourages shared responsibility between the insurer and the insured in managing healthcare expenses and can result in lower premiums for the insured, as they are accountable for a portion of their costs.

This structure contrasts with flat fee payments, which denote a fixed amount due per service regardless of treatment costs. Full coverage would imply that the insurance pays for all eligible expenses without requiring a cost-sharing arrangement like coinsurance, while per visit fees refer to copayments, where the insured pays a set dollar amount for each visit or service. Coinsurance thus represents a cost-sharing approach that requires an understanding of the percentage split between the insured and the insurer.