Coinsurance
The percentage of a covered cost the policyholder pays after the deductible, such as 20 percent, until the out-of-pocket maximum is reached.
Overview
In health insurance, an 80/20 plan means the insurer pays 80 percent of allowed charges after the deductible and the member pays 20 percent, so a 10,000 dollar hospital bill could still leave a meaningful share for the patient until the annual out-of-pocket maximum caps it. Coinsurance applies to allowed amounts negotiated by the network, and out-of-network care often carries a higher percentage plus balance billing risk. In property insurance the same word means something different: a coinsurance clause requires a building to be insured to a stated percentage of its value, commonly 80 or 90 percent, and an underinsured owner receives a proportionally reduced claim payment even on a partial loss.
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