What Is Coinsurance? How It Works, With Examples

What is coinsurance? Coinsurance is the percentage of a covered medical bill you pay after you've met your deductible. If your health plan has 20% coinsurance, you pay 20% of the allowed cost of each covered service and your insurance company pays the other 80%, until you reach your plan's out-of-pocket maximum.

Coinsurance is one of the biggest drivers of out-of-pocket costs in health insurance, alongside deductibles and copays. Many people don't think about it until a large bill arrives. Knowing how coinsurance works helps you predict medical costs, compare plans during open enrollment, and avoid surprises. This guide covers:

• What coinsurance means, with quick examples
• How coinsurance works with your deductible, copays, and out-of-pocket maximum
• How to calculate coinsurance costs step by step
• What 80/20, 70/30, and 0% coinsurance mean
• Copay vs. coinsurance, and in-network vs. out-of-network coinsurance

What is coinsurance? A clear definition and quick example

Coinsurance refers to your share of the cost of a covered health care service, calculated as a percentage of the allowed amount for that service. The allowed amount is the price your insurance company has agreed to pay a provider, which is usually lower than the provider's full bill. HealthCare.gov defines coinsurance as the percentage you pay after you've paid your deductible.

Unlike a copay, which is a flat fee, coinsurance scales with the total cost of the service. Here's what that looks like once your deductible is met:

• 20% coinsurance, $200 office visit: you pay $40 and your insurer pays $160.
• 30% coinsurance, $1,000 imaging bill: you pay $300 and your insurer pays $700.
• 10% coinsurance, $5,000 hospital stay: you pay $500 and your insurer pays $4,500.

Because coinsurance is a percentage, a small visit to the doctor's office produces a small charge, while surgery or a hospital stay produces a much larger one. For a sense of what's typical, the KFF 2025 Employer Health Benefits Survey found that the average coinsurance rate for workers in employer plans is 19% for primary care and specialist visits and 20% for a hospital admission.

How does coinsurance work with your deductible and out-of-pocket maximum?

Coinsurance doesn't work alone. It's one stage in a year of coverage that runs in this order:

1. Before you meet your deductible: you generally pay directly for the full allowed cost of covered services. Many plans cover preventive care at no cost even before the deductible. (See what is a deductible for how this stage works.)
2. After you meet your deductible: coinsurance kicks in. You pay your coinsurance percentage of each covered bill, and the plan starts paying the remaining costs.
3. After you reach your out-of-pocket maximum: once your deductible, copays, and coinsurance payments add up to your plan's out-of-pocket maximum, your plan pays 100% of covered in-network care for the rest of the plan year.

Your coinsurance payments count toward the out-of-pocket maximum, and premiums don't. For 2026, the out-of-pocket maximum for Marketplace and most other ACA-compliant plans can be no more than $10,600 for an individual and $21,200 for a family, and many employer plans set lower limits. For a side-by-side look at the two limits, see deductible vs. out-of-pocket maximum.

Quick scenario: say your plan has a $2,000 deductible, 20% coinsurance, and a $6,000 out-of-pocket maximum. You pay the first $2,000 of covered costs yourself. After that, coinsurance applies and you pay 20% of each bill. You'd reach the $6,000 out-of-pocket maximum after another $4,000 in coinsurance, which is 20% of $20,000 in covered bills. From then on, you pay $0 for covered in-network care until the plan year resets.

How to calculate coinsurance costs, step by step

To calculate coinsurance, you need four details from your plan: the allowed amount for the service, how much of your deductible remains, your coinsurance percentage, and how close you are to your out-of-pocket maximum. Here's a worked example:

1. Find the allowed amount: an MRI with an allowed amount of $3,000.
2. Check your remaining deductible: your deductible amount is $1,500 and you've already paid $500, so $1,000 remains.
3. Apply the deductible first: you pay $1,000 toward the deductible, leaving $2,000 of the bill.
4. Apply your coinsurance percentage: with 20% coinsurance, you pay 20% of $2,000, which is $400. Your insurer pays $1,600.
5. Add it up: your total cost for this MRI is $1,000 + $400 = $1,400.

If you're close to your out-of-pocket maximum, you only pay up to that limit, so some of the coinsurance amount may not apply. Your explanation of benefits (EOB) shows how each claim was split, so you can check the math after the fact.

Common coinsurance rates: 80/20, 70/30, and 0% coinsurance

Plans often describe coinsurance as a split between the insurance plan and you after the deductible:

• 80/20: the plan pays 80% and you pay 20%. With 20% coinsurance on a $10,000 hospital bill after the deductible, you'd owe $2,000, unless you hit your out-of-pocket maximum first.
• 70/30 or 60/40: you pay 30% or 40%. These plans often come with lower premiums, but your share of a big bill is larger.
• 90/10: you pay 10%, usually in exchange for a higher premium.
• 0% coinsurance: some plans charge no coinsurance for certain services, or after the deductible. Many in-network preventive services are covered with no cost sharing at all.

Coinsurance rates can vary depending on the type of service. A plan might charge a copay for primary care visits and prescriptions at the pharmacy, but 20% coinsurance for imaging, outpatient surgery, or hospital care. Your Summary of Benefits and Coverage lists the rate for each service.

Copay vs. coinsurance: key differences

Copays and coinsurance are both forms of cost sharing, but they work differently:

• Copay: a fixed dollar amount, such as $30, that you pay for a specific service like an office visit or a prescription. Copays often apply even before you meet your deductible, depending on the plan.
• Coinsurance: a percentage of the allowed amount that you pay after the deductible. The dollar amount changes with the total cost of the service.
• Deductible: what you pay each year before your plan starts sharing most costs. Coinsurance usually begins once you've met your deductible.

Example: a specialist visit has an allowed amount of $300. With a $50 copay, you pay $50. With 20% coinsurance and your deductible met, you pay $60. If the visit includes a procedure and the allowed amount is $1,500, the copay is still $50, while 20% coinsurance comes to $300. That predictability is why copays are common for routine care, while coinsurance is more common for larger, less predictable costs. Employee benefits vary depending on the employer, so check whether your plan uses copays, coinsurance, or both.

In-network vs. out-of-network coinsurance

Coinsurance can vary based on whether a provider is in your plan's network. In-network care is billed at negotiated rates, and your payments count toward your in-network out-of-pocket maximum. Out-of-network coinsurance is often higher, and an out-of-network provider may bill you for the difference between their charge and the allowed amount, which is called balance billing.

Some plans, including many HMOs and EPOs, don't cover non-emergency out-of-network care at all, so you'd pay the whole bill. (See HMO vs. PPO and EPO vs. PPO for how network rules differ.) The No Surprises Act protects you from balance bills for most emergency care and for certain out-of-network care at in-network facilities.

To keep coinsurance costs predictable:

• Confirm a provider's network status before scheduling a costly procedure.
• Ask your insurer or provider for a cost estimate based on the allowed amount.
• Check your plan documents for separate in-network and out-of-network out-of-pocket maximums.

How coinsurance works in Medicare

Medicare uses coinsurance too. Under Original Medicare, you generally pay 20% of the Medicare-approved amount for most Part B services after the Part B deductible, which is $283 in 2026. Original Medicare has no out-of-pocket maximum. In Part D, you typically pay 25% coinsurance for covered drugs after the deductible until your out-of-pocket spending reaches $2,100 in 2026. Medicare Advantage plans must cap in-network out-of-pocket costs at no more than $9,250 in 2026.

Paying coinsurance with an HSA or FSA

Coinsurance, copays, and deductibles are qualified medical expenses, so you can pay them with money from a health savings account (HSA) or flexible spending account (FSA). These accounts are funded with pre-tax dollars. If your plan has meaningful coinsurance, planning your HSA or FSA contribution around your likely costs can make bills easier to budget for. Learn how the two accounts compare in HSA vs. FSA, and see the open enrollment cheat sheet for the other plan terms worth knowing. If you're weighing a high-deductible plan, PPO vs. HDHP explains how coinsurance and deductibles differ between plan types.

Once you know your deductible, coinsurance percentage, and out-of-pocket maximum, you can estimate what any covered service will cost and compare health plans on more than the monthly premium.