Coinsurance is the percentage of a medical bill you pay after you’ve met your annual deductible, with your health insurance covering the rest. The most common split is 80/20, meaning your insurer pays 80% of the approved cost for a service and you pay 20%. It applies to most covered services, from surgeries to specialist visits, and understanding how it works can prevent surprises when a big medical bill arrives.
How Coinsurance Is Calculated
Coinsurance is always expressed as a percentage of the insurance plan’s approved amount for a service. If your plan has 20% coinsurance and the approved amount for a treatment is $100, you pay $20 and your insurer pays $80. For a $5,000 surgery, your share would be $1,000.
The percentage varies by plan. Budget-friendly plans with lower monthly premiums often come with higher coinsurance, sometimes 30% or even 40%. Plans with higher premiums tend to offer lower coinsurance, like 10%. The key number to focus on when comparing plans isn’t just the coinsurance percentage in isolation. It’s how that percentage interacts with your deductible and out-of-pocket maximum.
Where Coinsurance Fits in the Payment Sequence
Your costs for any medical bill follow a specific order, and coinsurance sits in the middle of that sequence.
First, you pay your deductible. This is a fixed dollar amount you owe out of pocket before your insurance begins sharing costs. If you have a $1,000 deductible, you’re responsible for the first $1,000 of covered medical expenses each year. Your insurer pays nothing toward those bills (aside from preventive care, which is handled differently).
Once you’ve hit that deductible, coinsurance kicks in. From that point forward, you and your insurer split every covered bill according to your plan’s ratio. With 20% coinsurance, you pay 20 cents of every dollar and your plan picks up the other 80 cents.
This continues until you reach your plan’s out-of-pocket maximum. That’s the ceiling on what you’ll spend in a single year. Once your deductible payments, coinsurance payments, and copays add up to that limit, your insurance covers 100% of all remaining covered care for the rest of the year. For 2025 Marketplace plans, that cap can’t exceed $9,200 for an individual or $18,400 for a family.
A Full Example With Real Numbers
Say you have a plan with a $1,500 deductible, 20% coinsurance, and a $6,000 out-of-pocket maximum. In March, you need a procedure that costs $10,000.
You pay the first $1,500 yourself (your deductible). That leaves $8,500 for your insurer to process. Your 20% coinsurance on that remaining amount is $1,700. Your insurer covers the other $6,800. Your total bill for that procedure: $3,200 ($1,500 deductible plus $1,700 coinsurance).
Now, if you need more care later that year, you’ve already met your deductible, so every future bill goes straight to the coinsurance split. And once all your out-of-pocket spending for the year hits $6,000, you stop paying entirely for covered services.
Coinsurance vs. Copays
Copays and coinsurance both come out of your pocket, but they work differently. A copay is a flat dollar amount you pay at the time of service: $30 for a primary care visit, $50 for a specialist, $15 for a generic prescription. It doesn’t change based on the total cost of the visit.
Coinsurance, by contrast, scales with the bill. A 20% coinsurance on a $200 lab test costs you $40, but that same 20% on a $50,000 hospital stay costs $10,000 (before hitting your out-of-pocket max). Many plans use both: copays for routine visits and prescriptions, coinsurance for larger services like hospital stays, imaging, and surgeries.
Out-of-Network Coinsurance Costs More
If you see a provider outside your plan’s network, your coinsurance percentage typically jumps. A plan that charges 20% coinsurance for in-network providers might charge 40% for out-of-network care. The allowed amount your plan uses to calculate that percentage may also be lower than what the out-of-network provider actually charges, leaving you responsible for the difference.
Out-of-network costs sometimes don’t count toward your plan’s out-of-pocket maximum either, so the safety net that normally caps your spending may not apply. Checking whether a provider is in-network before scheduling care is one of the most effective ways to avoid unexpectedly large coinsurance bills.
Preventive Care Has Zero Coinsurance
Under the Affordable Care Act, all Marketplace plans and many employer plans must cover a broad list of preventive services with no coinsurance, no copay, and no deductible requirement. This applies when you use an in-network provider.
The list includes blood pressure screening, cholesterol checks, colorectal cancer screening for adults 45 to 75, depression screening, diabetes screening for overweight adults 40 to 70, HIV screening, lung cancer screening for high-risk adults, most adult immunizations (flu, HPV, shingles, hepatitis B, and others), obesity counseling, and tobacco cessation programs. These services are fully covered regardless of whether you’ve met your deductible.
Coinsurance Under Medicare
Medicare Part B uses a straightforward coinsurance structure: you pay 20% of the Medicare-approved amount for covered services after meeting your annual Part B deductible. There is no out-of-pocket maximum built into Original Medicare, which means that 20% can add up significantly if you need extensive care.
This is one reason many Medicare beneficiaries buy a Medigap (Medicare Supplement) policy. Medigap plans are specifically designed to cover some or all of the coinsurance that Original Medicare leaves behind. The exact coverage depends on which lettered plan you choose, but several popular options pay your full 20% Part B coinsurance, reducing your cost for covered services to zero after your Medigap premium.
How to Lower Your Coinsurance Costs
Your coinsurance percentage is locked into your plan for the year, but you have some control over how much it costs you in practice. Staying in-network is the single biggest lever, since in-network rates are pre-negotiated and your coinsurance percentage is lower. If you have a choice between facilities for a procedure, comparing the plan’s allowed amounts at each location can mean paying the same percentage on a meaningfully smaller bill.
If you anticipate high medical costs in a given year (a planned surgery, ongoing treatment, pregnancy), a plan with higher monthly premiums but lower coinsurance and a lower out-of-pocket max often saves money overall. Run the math: multiply your expected bills by the coinsurance percentage, add the deductible and premiums, and compare totals across plan options. The cheapest premium rarely means the cheapest year.