What does "coinsurance" refer to in health insurance?

Coinsurance is a key component of many health insurance plans and refers specifically to the percentage of healthcare costs that the insured individual is responsible for after they have met their deductible. This means that once a person has incurred enough medical expenses to reach the deductible threshold, coinsurance kicks in, requiring them to pay a designated percentage of subsequent bills while the insurance provider covers the remaining portion.

For example, if a health insurance plan has a coinsurance rate of 20%, the insured person would pay 20% of the eligible medical expenses while the insurer would pay the remaining 80%. This system helps share costs between the insurer and the insured, promoting cost awareness and potentially encouraging individuals to make more informed healthcare decisions.

Other terms mentioned in the incorrect options describe different aspects of health insurance. A fixed amount paid for medical services refers to a copayment, while the total annual premium reflects what individuals pay to maintain their insurance coverage. The amount deducted from a claim before reimbursement is a deductible itself. Each of these terms serves a distinct function within the framework of health insurance, but coinsurance specifically pertains to the cost-sharing aspect following the deductible.