Illinois Health Insurance Practice Exam

Coinsurance is defined as a percentage of healthcare costs that the insured is responsible for paying after meeting their deductible. This means that once the insured has paid their deductible—a predetermined amount they must cover out of pocket before insurance kicks in—they then enter the coinsurance phase. For example, if a health plan has a coinsurance rate of 20%, the insured would pay 20% of the cost of each healthcare service while the insurance company would cover the remaining 80%.

This mechanism is designed to share the financial responsibility between the insured and the insurance provider, which can help manage the costs and discourage unnecessary use of healthcare services. Coinsurance continues until the insured reaches their out-of-pocket maximum, after which the insurer typically covers 100% of the costs for covered services.

This understanding of coinsurance is crucial for individuals to make informed decisions regarding their healthcare expenses and to understand potential costs they may incur when they receive medical care.