- Coinsurance is the percentage of a covered medical bill you pay after meeting your deductible, with your insurer paying the rest.
- A common split is 80/20: insurance pays 80% and you pay 20% of the negotiated cost.
- Coinsurance is a percentage of the bill, while a copay is a flat dollar fee — that is the key difference.
- Your total coinsurance is capped: once you hit your out-of-pocket maximum, insurance pays 100%.
- Coinsurance almost always applies only to in-network care; out-of-network coinsurance is higher or not covered at all.
Coinsurance is the percentage of a covered medical bill that you pay after you have met your deductible, while your insurance company pays the rest. If your plan has 20% coinsurance, you pay 20% of the negotiated cost of a service and your insurer pays the other 80% — until you reach your yearly out-of-pocket maximum.
Coinsurance is often confused with a copay, but they work very differently: one is a percentage, the other a flat fee. This guide explains what coinsurance is, how it works with a real dollar example, when it applies, and exactly how it differs from a copay so you can predict what you will actually owe.
What is coinsurance?
Coinsurance is your share of the cost of a covered health care service, calculated as a percentage of the amount your plan allows. The HealthCare.gov glossary defines it as “the percentage of costs of a covered health care service you pay after you’ve paid your deductible.”
Coinsurance is usually written as two numbers, such as 80/20. The first number is the insurer’s share (80%) and the second is yours (20%). Common splits include 90/10, 80/20, and 70/30 — the higher your share, the lower your monthly premium tends to be.
Three rules govern how coinsurance behaves:
- It starts after the deductible. You typically pay 100% of covered costs until you meet your deductible; only then does coinsurance kick in.
- It is based on the negotiated rate. Your percentage applies to the plan’s allowed (in-network) amount, not the provider’s inflated list price.
- It is capped. Once your total spending reaches your out-of-pocket maximum, coinsurance stops and insurance pays 100% of covered care.
How coinsurance works: a worked dollar example
Suppose Priya has already met her $2,000 deductible for the year and has 20% coinsurance with a $6,000 out-of-pocket maximum. In August she needs an outpatient procedure with a negotiated (in-network) price of $5,000.
- Because she has met her deductible, coinsurance applies to the full $5,000.
- Priya’s 20% share = $1,000.
- Her insurer’s 80% share = $4,000.
Now suppose Priya had already paid $5,300 toward her out-of-pocket maximum earlier in the year. Her remaining exposure is only $700 ($6,000 − $5,300). So instead of paying the full $1,000, she pays $700, hits her out-of-pocket maximum, and her insurer covers the rest — and everything else for the remainder of the plan year.
This is why coinsurance on a big-ticket item can feel scary but is not unlimited: your out-of-pocket maximum is the backstop. It also shows why the negotiated price matters so much — if you can negotiate the bill or choose a lower-priced facility for something like an MRI, your 20% share shrinks along with it.
Coinsurance vs. copay: what’s the difference?
This is the single most common point of confusion. Both are forms of cost-sharing, but they are calculated in opposite ways. A copay (copayment) is a flat dollar amount you pay for a specific service — say $30 for a doctor visit or $15 for a generic prescription. Coinsurance is a percentage of the total cost.
| Coinsurance | Copay | |
|---|---|---|
| How it’s calculated | A percentage of the bill (e.g. 20%) | A flat dollar fee (e.g. $30) |
| When it usually applies | After you meet the deductible | Often at the time of service, sometimes before the deductible |
| Predictability | Varies with the cost of care | Fixed and known in advance |
| Typical use | Larger services: surgery, imaging, hospital stays | Routine visits and prescriptions |
| Counts toward out-of-pocket max? | Yes | Yes |
Per the HealthCare.gov glossary, a copayment is “a fixed amount you pay for a covered health care service after you’ve paid your deductible” — though in practice many plans charge copays for routine visits even before the deductible is met. Coinsurance, by contrast, almost always waits until after the deductible.
A quick side-by-side makes the difference concrete. Imagine two people who both need a $4,000 outpatient procedure after meeting their deductibles. The first has a flat $250 copay for that procedure and knows the exact cost in advance — $250, no matter what. The second has 20% coinsurance and owes $800 (20% of $4,000), a number that would have risen to $1,000 at a facility charging $5,000. The copay is predictable but fixed; the coinsurance rewards choosing a lower-priced, in-network provider. Some plans even combine the two — a copay for the visit plus coinsurance on the associated tests or drugs — so it pays to read your Summary of Benefits and Coverage carefully.
Neither structure is universally cheaper. Copays make budgeting easy and protect you when care is expensive, while coinsurance can cost less on low-priced services but exposes you to more on big-ticket ones. The safety net in both cases is the same: your out-of-pocket maximum.
When does coinsurance apply?
Coinsurance most often shows up on larger, less routine services — hospital stays, surgery, imaging, specialist procedures, and sometimes brand-name or specialty drugs. Routine primary-care and urgent-care visits are more likely to carry a flat copay instead.
A few situations to watch for:
- In-network vs. out-of-network. Coinsurance is almost always lower in-network. Out-of-network care may carry a much higher coinsurance percentage (say 40%) or may not be covered at all, leaving you responsible for the full bill.
- Medicare. Original Medicare uses coinsurance heavily — for example, 20% coinsurance for many Part B services after the deductible, per Medicare.gov. This is a major reason people buy supplemental coverage.
- Paying your share. You can pay coinsurance with tax-advantaged dollars from an HSA, which effectively discounts it by your tax rate.
Common mistakes and money-saving tips
- Assuming coinsurance is a flat fee. Because it is a percentage, your bill scales with the cost of care. A higher-priced facility means a bigger 20% share, so where you get care still matters even after you meet your deductible.
- Forgetting the out-of-pocket maximum. Coinsurance is not unlimited. Track your spending; once you hit the cap, further covered care costs you nothing.
- Going out-of-network by accident. Confirm every provider in your care — including anesthesiologists and radiologists — is in-network to avoid a much higher coinsurance rate.
- Not checking the negotiated price. Since your share is a percentage of the allowed amount, asking for an itemized, negotiated estimate up front lets you predict your coinsurance.
- Paying with after-tax money. If you have an HSA, use it for coinsurance to pay with pre-tax dollars.
Frequently asked questions
Is coinsurance the same as a copay?
No. A copay is a fixed dollar amount (like $30 per visit), while coinsurance is a percentage of the total cost (like 20% of the bill). Copays are predictable; coinsurance varies with how expensive the service is.
Do I pay coinsurance before or after my deductible?
After. You generally pay the full negotiated cost of covered services until you meet your deductible, and only then does coinsurance begin. Copays, by contrast, sometimes apply even before the deductible is met.
What does 80/20 coinsurance mean?
It means that after your deductible, your insurance pays 80% of a covered service’s cost and you pay the remaining 20%. This continues until you reach your out-of-pocket maximum, after which insurance pays 100%.
Is there a limit to how much coinsurance I pay?
Yes. Your annual out-of-pocket maximum caps your total spending, including deductible, coinsurance, and copays. Once you reach it, you pay no more coinsurance for covered, in-network care that year.
Does coinsurance count toward my out-of-pocket maximum?
Yes. Coinsurance payments count toward your out-of-pocket maximum, along with your deductible and copays. Only your monthly premium does not count.
Why is my coinsurance so high?
High coinsurance usually means you chose a lower-premium plan, received expensive care, or went out-of-network. Because it is a percentage of the bill, high-cost services produce a large coinsurance amount — which is why shopping for lower-priced, in-network care helps even when you are insured.
Related reading: learn how your deductible must be met before coinsurance starts, see how an HSA lets you pay coinsurance with pre-tax dollars, understand why shopping for an MRI lowers your percentage share, and browse the full Healthcare Costs guide for more ways to lower what you pay.
Cost-sharing figures in this article are illustrative and reflect 2026 — always verify your specific plan’s terms and current federal limits before relying on them. This article is general information, not medical or financial advice.