Which term refers to an insurance provision commonly implemented at 80% coverage, with the remainder paid as out-of-pocket costs?

Which term refers to an insurance provision commonly implemented at 80% coverage, with the remainder paid as out-of-pocket costs?

• A. Copayment
• B. Deductible
• C. Coinsurance
• D. Premium

Answer: (C)

Coinsurance describes how costs are shared after coverage begins: the insured pays a percentage of the covered expenses, while the insurer pays the rest. An 80% coverage arrangement means the insurer covers 80% of the allowed costs and the patient covers the remaining 20% as out-of-pocket costs. For example, a $1,000 bill would result in $800 paid by the insurer and $200 owed by the patient, though the exact amounts can be influenced by deductibles or out-of-pocket maximums in the plan. This is different from a copayment, which is a fixed amount paid per visit; a deductible, which is the amount you must pay before the insurer starts paying; and a premium, which is the ongoing payment to keep the policy active regardless of usage.

Coinsurance describes how costs are shared after coverage begins: the insured pays a percentage of the covered expenses, while the insurer pays the rest. An 80% coverage arrangement means the insurer covers 80% of the allowed costs and the patient covers the remaining 20% as out-of-pocket costs. For example, a $1,000 bill would result in $800 paid by the insurer and $200 owed by the patient, though the exact amounts can be influenced by deductibles or out-of-pocket maximums in the plan. This is different from a copayment, which is a fixed amount paid per visit; a deductible, which is the amount you must pay before the insurer starts paying; and a premium, which is the ongoing payment to keep the policy active regardless of usage.