What is a coinsurance clause?

A coinsurance clause is a type of health insurance policy condition that requires policyholders to pay a percentage of the cost of covered medical services. The coinsurance clause is in place to reduce the cost of the policyholder’s overall insurance coverage. In California, coinsurance is typically expressed as a percentage, such as 10-20%. This means that, after the insured pays the deductible, the policyholder is responsible for a certain percentage of the remaining cost of the service. For example, if the coinsurance is 20%, and a doctor’s visit costs $100, the insured is responsible for 20% of the cost, or $20. The insurance company is responsible for the remaining 80%. Coinsurance is different from a copayment, which requires the policyholder to pay a fixed dollar amount for services—this amount is usually lower than the actual cost of the service and is paid at the time of the visit. In order to encourage policyholders to use less expensive services, some plans offer different coinsurance rates for different types of services. For example, a plan may require a lower coinsurance rate for preventative care than for more specialized services. A coinsurance clause is an important part of health insurance law in California, and understanding it is important for policyholders to make informed decisions about their care.

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