What is co-insurance in the context of health insurance?

Co-insurance is defined as the percentage of costs for covered healthcare services that the insured is responsible for paying after the deductible has been satisfied. This arrangement typically requires the insured individual to take on a shared financial responsibility for their healthcare expenses. For example, if a health plan has a co-insurance clause of 20%, after the insured meets their deductible, they would pay 20% of the costs of covered services while the insurance covers the remaining 80%.

Understanding co-insurance is crucial, as it directly impacts how much a person pays out-of-pocket for health care beyond the set deductible. This concept is significant for budgeting health care expenses and knowing the potential costs involved in receiving care.

The other options do not accurately describe co-insurance. A flat rate for each service refers to a copayment, the monthly premium amount pertains to the cost of maintaining health coverage rather than the sharing of costs post-deductible, and total out-of-pocket costs may encompass more than just co-insurance, including deductibles and copayments. These distinctions highlight the specific role that co-insurance plays within the broader structure of health insurance financial responsibilities.