Coinsurance In Health Insurance
  • Understand Coinsurance
  • Features Of Coinsurance
  • Do You Need Coinsurance?
Coinsurance In Health Insurance
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Introduction to Coinsurance In Health Insurance

There is a lot of jargon used in health insurance which may be quite confusing for a lot of us, right? Health insurance terms and conditions language is difficult for many to understand. Terms like coinsurance, co-pay, and deductibles are all a part of the health insurance glossary, which might sound similar but can be very different in application.

To understand coinsurance in health insurance, it is important to get to know about all of the above-mentioned terms. In this article, we aim to establish the concept of coinsurance making health insurance easier to understand. Further, we establish how it affects your overall health insurance premiums, as well as the benefits of the same.

What Is Coinsurance In Health Insurance?

Coinsurance is the amount a policyholder must pay toward a covered claim once the deductible is paid, every time they raise an insurance claim. It is typically represented as a fixed percentage/amount. Coinsurance in health insurance is very similar to co-pay, with subtle differences. Let us understand coinsurance with an example below:

Mr. Akshay purchased a health insurance plan with a coinsurance clause of 20% meaning that he is liable to pay 20% of the treatment costs while the health insurer pays for the rest.

If the medical treatment Mr. Akshay availed is INR 10,000, then according to the coinsurance clause, he is liable to pay INR 2,000, and the rest of INR 8,000 will be paid by the insurer. This amount is generally calculated after the deductibles are calculated.

What Is The Difference Between Coinsurance and Co-Pay In Health Insurance?

To further understand the difference between coinsurance and co-pay refer to the table provided below:

CSR and Incurred Claim Ratio of General and Health Insurers (%)

Coinsurance Co-Pay
Coinsurance is a fixed percentage that you have to pay before the health insurer bears the expenses towards your medical treatments after your deductibles are metCo-pay is a fixed percentage or amount that you have to pay towards a medical expense.
Coinsurance is paid only after your deductible limit is exhaustedYou do not need to have a deductible clause to utilize a co-pay
Coinsurance is paid directly to the insurance providerWith a co-pay clause, you will have to pay a fixed percentage each time you avail of medical treatments to the hospital/healthcare provider.

What Is The Difference Between Coinsurance and Deductibles In Health Insurance?

To further understand the difference between coinsurance and deductibles refer to the table provided below:

Coinsurance Deductibles
Coinsurance is a fixed percentage or amount pre-determined by your health insurer that will be paid towards the medical treatments availedDeductibles refer to the amount chosen by you as a policyholder which will be paid towards the medical treatments availed
Every time you raise a health insurance claim, coinsurance is applicableYou have to pay your deductibles only once during a policy term
Coinsurance may vary as per the amount of claim you raiseDeductibles are a fixed amount that you pay directly to the healthcare provider

Know More About- Co-pay vs Deductible Vs Coinsurance

Features Of Coinsurance In Health Insurance

The certain features of coinsurance in health insurance are:

  • Safeguards health insurance providers from large amounts of claims from policyholders
  • Before a coinsurance clause is activated you have to meet your deductible amount
  • It would be safe to say that a coinsurance in health insurance is a combination of co-pay and deductibles
  • Similar to co-pay, coinsurance in health insurance is fixed

Should You Select Coinsurance In Health Insurance?

The primary reason anyone enquires about coinsurance in health insurance is to reduce their overall health insurance premiums in the coming days. However, your liability towards the health insurance plan will increase.

A large amount of your medical bill will be paid out of pocket in case you opt for a coinsurance in health insurance. This may cause a problem in the long run if you do not have cash in hand to pay your medical bills in case of any emergency hospitalization.

Since coinsurance is an expense-sharing plan between the insurer and policyholder, it is an important component of your health insurance policy. Utilising coinsurance, you can legitimately reduce the premium amounts in the future, thus making the policy more affordable.

The Final Verdict

Coinsurance in health insurance is a tool provided to you that helps you lower the overall health insurance premiums. This article broadens your understanding of coinsurance, co-pay, and deductibles, and how they work. However, it is advisable to opt for health insurance plans that are free of such clauses as they increase out-of-pocket expenditure on medical care facilities which are not cheap.

With a plethora of affordable and comprehensive health insurance plans in the market, it is advisable to conduct thorough research and invest in a health plan suitable for you and your family.

To further understand coinsurance in health insurance, connect with our health insurance experts at PolicyX and opt for the best health insurance plans that fit your bill, perfectly!

Coinsurance In Health Insurance: FAQ's

1. What is coinsurance in health insurance?

Coinsurance in health insurance is the amount that an insured must pay toward a covered claim once the deductible is paid. It is typically represented as a fixed percentage or amount.

2. Are there health insurance policies without a coinsurance clause?

Yes, there are a plethora of health insurance plans without the coinsurance clause available in the market.

3. How will coinsurance in health insurance benefit you?

A coinsurance clause will help you reduce the overall health insurance premiums to be paid in future years.

4. Are deductibles and coinsurance applied at the same time in health insurance?

Yes, coinsurance is levied once you fulfil your deductibles limit.

5. Should you purchase health insurance plans with 0% coinsurance?

Yes, it is advised to purchase health insurance plans with 0% coinsurance, co-pay or deductibles as all of these clauses may require you to pay for medical treatments out of pocket which makes health insurance more of a liability for many.

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Simran Kaur Vij

Written By: Simran Kaur Vij

Simran is an insurance expert with more than 3 years of experience in the industry. She may have all the answers to your insurance queries. With a background in Banking, she proactively helps her readers to stay on par with all the latest Insurance industry developments.