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Coinsurance is the cost of a covered service that the consumer must pay after payment of the full deductible. This cost is usually expressed as a percentage of the total cost of the service.1 Coinsurance is one type of cost sharing – that is, ways the consumer and the insurance company share the costs of covered services. Many health insurance policies charge consumers for cost sharing in addition to monthly premiums.
Insurance Coverage Under the Affordable Care Act
When President Obama signed the Affordable Care Act (ACA) into law in 2010, the federal government put some restrictions on coinsurance. For example, health insurance policies could no longer require any cost sharing for certain preventive care. That means health insurance companies cannot charge coinsurance (or copayments or deductibles, for that matter) for these services, unless the policies were grandfathered.2
Preventive Services Not Subject to Coinsurance
Preventive services not covered by coinsurance are those services identified as being of greatest importance for health, such as cancer screenings. Three agencies were tasked with creating the list of services to include as preventive: the United States Preventive Services Task Force, the Health Resources and Services Administration, and the Advisory Committee on Immunization Practices.3 These organizations developed lists of treatments that are most likely to benefit the public.4
The list of preventive care not subject to coinsurance is lengthy. It includes:
- Alcohol misuse screening and counseling
- Aspirin use to prevent cardiovascular disease and colorectal cancer for adults 50 to 59 years with a high cardiovascular risk
- Blood pressure screening
- Cholesterol screening for adults of certain ages or at higher risk
- Colorectal cancer screening for adults 50 to 75
- Depression screening
- Diabetes (Type 2) screening for adults 40 to 70 years who are overweight or obese
- Diet counseling for adults at higher risk for chronic disease
- Falls prevention (with exercise or physical therapy and vitamin D use) for adults 65 years and over, living in a community
- HIV screening for everyone ages 15 to 65, and other ages at increased risk
- Immunization vaccines
- Lung cancer screening
- Obesity screening and counseling
- Statin preventive medication for adults 40 to 75 at high risk
- Tobacco use screening for all adults and cessation interventions for tobacco users5
Under certain circumstances, consumers can be required to pay coinsurance for preventive care: if they have a grandfathered policy from their employer or if they are in a managed care plan and get services from an out-of-network provider.6
Rules Regarding the Out-of-Pocket Maximum
In addition to prohibiting insurers from charging coinsurance for preventive care, the ACA also requires all policies to have a yearly maximum out-of-pocket expense. The out-of-pocket expense is the total amount that a consumer would have to pay in a year for all cost sharing, including deductibles, copays, and coinsurance. The out-of-pocket maximum does not include premiums.7 A premium is the amount the consumer pays each month to buy a health care policy.
The ACA, Coinsurance, and Subsidies
The ACA public insurance marketplace (also called the health benefit exchange) subsidizes the cost of insurance for people with income between 100% and 250% of the federal poverty rate. Coinsurance is determined on a sliding scale, based on income, for eligible participants who purchase a Silver plan on the exchange. At the lowest end of the income scale, coinsurance is at 0%, and 100% of health insurance costs are covered.8
Coinsurance Statistics and Facts
Most health insurance plans have cost sharing in the form of coinsurance.9 How many Americans does that affect?
- Around 50% of Americans get their health insurance through their employers and another 6% get it on the private market, either from the exchange or from “off-exchange” markets.10 The average coinsurance rate is around 20% for office visits.11
- One-third of Americans receive Medicare or Medicaid, government-funded insurance available to the elderly, the disabled, and those with a low income. There are only minimal coinsurance costs for those on Medicaid.12 Individuals with Medicare coverage pay varying amounts of coinsurance, depending on the service. For example, coinsurance for the first sixty days of a hospital stay is $0, but for doctor visits, coinsurance is 20% of the cost of the visit, after you’ve met your deductible.13
For the majority of Americans, then, cost sharing is a part of the health insurance process. How can they prepare for these expenses?
Calculating Your Coinsurance Expenses
After you receive services, you might wonder how much you could owe in coinsurance. These three steps can help:
- Know the coinsurance percentage that applies to the services you receive. This is usually located in the Summary of Benefits from your health insurance provider.14 Not all services will have the same coinsurance; it varies depending on the type of service.
- Find the cost of care on the Explanation of Benefits (EOB). The EOB is a document the insurance company will send you showing the allowable rate the health provider can charge. Insurance companies negotiate specific rates with providers.
- Multiply your allowable rate for each service by the coinsurance percentage to get the amount you owe. For example, if the allowable charge for a service is $100, and your coinsurance for this service is 20%, you will owe the provider $20.15
Keep in mind that you probably won’t owe anything for qualifying preventive care. But you will owe 100% of the allowable cost of other services, up to the amount of your deductible, and then whatever you might owe for coinsurance. However, no matter how high the bill, you cannot owe more for services covered by your insurance than your annual out-of-pocket maximum in any one year.
1Healthcare.gov, “Coinsurance.” Retrieved from
2Davis, Elizabeth, RN. February 27, 2019. “Preventive Care: What’s Free and What’s Not.” Very Well Health.
3Davis, Elizabeth, RN. February 27, 2019. “Preventive Care: What’s Free and What’s Not.” Very Well Health.
4US Preventive Services Task Force. “Grade Definitions.”
5Healthcare.gov. “Preventive care benefits for adults.”
6Norris, Louise. December 9, 2018. “How Obamacare Changed Employer-Sponsored Health Insurance.” Very Well Health.
7Healthmarkets.com. “What is coinsurance?”
8Healthmarkets.com. “What is coinsurance?”
9eHealth. April 4, 2018. “How Does My Out of Pocket Maximum Work?”
10Norris, Louise. February 23, 2019. “An Overview of Health Insurance Plans.” Very Well Health.
11Henry J. Kaiser Family Foundation. September 19, 2017. “2017 Employer Health Benefits Survey. Section 7: Employee Cost Sharing.”
12“Cost Sharing Out of Pocket Costs.” Medicaid.gov.
13United Medicare Advisors. “Medicare Copayment and Coinsurance Costs: Know the Differences.”
14Davis, Elizabeth, RN. December 6, 2018. “How To Calculate Your Health Plan Coinsurance.” Very Well Health.
15Davis, Elizabeth, RN. December 6, 2018. “How To Calculate Your Health Plan Coinsurance.” Very Well Health.
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