Which of the following statements is true about coinsurance?

Coinsurance is a payment model in health insurance where the insured is responsible for a percentage of the total cost of a covered service after any applicable deductibles have been met. This means that after paying the deductible, the patient pays a specific percentage of the costs, while the insurer covers the rest. For instance, if a patient has a coinsurance rate of 20%, they would pay 20% of the total medical expense, and the insurance company would pay the remaining 80%.

This concept contrasts with fixed dollar amounts that define copayments, which are set fees for specific services regardless of the total cost. Coinsurance is also not universally applicable to all patients, as it varies depending on the terms of individual health insurance plans and policies. Furthermore, whether coinsurance is lower than copayments can vary by the plan and services rendered, making it inaccurate to assert that it is often lower.

Understanding coinsurance helps patients plan for out-of-pocket costs, particularly in situations involving major medical services, as it encourages the sharing of costs between the insurance provider and the insured.