What is a coinsurance clause?

A coinsurance clause is a contractual clause in health insurance law found in many insurance policies in Virginia. This clause requires that the insured party (the policyholder) pay a certain percentage of expenses when medical services are utilized. For instance, the policyholder may be obligated to pay 20% of all medical costs after meeting the deductible for the policy. This clause is important for health insurers because it helps to control costs and keeps premiums lower for policyholders. The coinsurance clause is different from a deductible in that the deductible is a flat fee that must be paid every time a medical service is utilized. The coinsurance clause requires the insured party to pay a certain percentage of the cost up to a certain limit, regardless of how many medical services are utilized. This helps to keep insurance premiums lower by reducing the cost of medical services. As an example, if a medical procedure costs $1,000 and the coinsurance clause states that the policyholder must pay 20%, then the policyholder must pay $200 and the insurer will pay the remaining $800. Coinsurance clauses allow the policyholder to access medical services at a reasonable cost, while the insurer is able to cover the majority of the expenses.

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What is a coinsurance clause?

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