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

Co-insurance is a fundamental concept in insurance plans that refers to the percentage of costs that the plan member is required to pay after they have met their deductible. In practical terms, this means that once an insured individual has paid their deductible amount, they will share the remaining costs of health care services with their insurance provider according to a predetermined percentage.

For example, if the co-insurance rate is 20%, after the deductible is paid, the insurance company will cover 80% of the medical costs, while the insured individual will be responsible for the remaining 20%. This arrangement helps manage healthcare expenses for both the insurer and the insured by involving the member in the financial responsibility for their healthcare utilization. Co-insurance is commonly found in many types of health insurance policies, and understanding this concept is crucial for effectively navigating and utilizing healthcare benefits.

The other options refer to distinct features of insurance plans. A fixed fee paid per service typically describes a copayment, while the total amount of claims covered by the insurer refers to the policy’s coverage limit. The percentage of premiums that are returned is not a standard aspect of co-insurance or health insurance plans.