What does "coinsurance" refer to in health insurance?

Coinsurance refers to a cost-sharing arrangement in health insurance where the insured agrees to pay a certain percentage of the covered expenses after the deductible has been met. For instance, if a health plan has a coinsurance rate of 20%, the insurer will cover 80% of the costs, while the insured is responsible for the remaining 20%. This mechanism helps to keep healthcare costs manageable and encourages the insured to make informed decisions about their healthcare utilization, as they will have a financial stake in the services received.

The other choices do not accurately represent coinsurance. The first choice suggests that the insurer pays 100% of the expenses, which does not involve any shared cost from the insured—this is not how coinsurance works. The third choice describes a scenario of full coverage, which is more indicative of a different type of insurance arrangement, rather than the shared cost principle. Lastly, the fourth choice relates to copayments, which are fixed fees paid at the time of service, and does not capture the percentage-based cost-sharing aspect of coinsurance.