What is a Coinsurance Rate?

Your co-insurance rate refers to the portion of your medical expenses, above your annual deductible. The most common co-insurance formula is 80% to 20% to $5,000.00, but a wide range of variations are common, including a 50% to 50% to $2,500.00 rate formula that has become quite popular in recent years.

Here’s an example of how it all works:

At the 80% to 20% to $5,000.00 co-insurance rate, that would mean that you’d have to pay 20% of the first $5,000.00 of claims above your deductible out-of-pocket. Your maximum out-of-pocket expenses in this example would be $1000.00 (that is to say: 20% of $5000.00).

Your "deductible" plus your "co-insurance rate" will usually be referred to as your "maximum out-of-pocket expenses.”