What does "coinsurance" refer to in health insurance?

Coinsurance refers to the percentage of costs that the insured must pay for healthcare services after they have met their deductible. This is a cost-sharing arrangement between the insurance company and the insured, where the insured is responsible for a specific percentage of the total medical expenses incurred for covered services. For instance, if a health plan has a coinsurance level of 20%, the insured would pay 20% of the covered medical costs while the insurer pays the remaining 80%.

This mechanism is designed to encourage insured individuals to share in the costs of their healthcare, which can help keep overall insurance premiums lower. The correct understanding of coinsurance is important for policyholders, as it impacts their out-of-pocket expenses when accessing medical care.

The other choices provided do not accurately describe coinsurance. For example, a flat fee for each doctor's visit describes a copayment, while the total annual amount payable refers to the maximum out-of-pocket limit or possibly even premium payments, which are different concepts.