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.”