What is 'coinsurance' in health insurance terms?

Coinsurance refers to the arrangement in health insurance where the insured individual shares a percentage of the costs for covered services after they have fulfilled their deductible. This means that once the insured has paid their deductible amount, they will then pay a specified percentage of additional medical costs, while the insurance company pays the rest. For example, if a health insurance plan has a coinsurance of 20%, after the deductible is met, the insured will pay 20% of each claim, and the insurer will cover the remaining 80%. This structure helps to distribute the cost burden between the insurer and the insured, ensuring that both parties contribute to the expenses of healthcare services.

The other options listed do not accurately represent coinsurance. A flat fee for each office visit describes a copayment, which is a fixed dollar amount for a service rather than a percentage. The total amount paid for insurance directly yearly would refer to premiums, not coinsurance. The full out-of-pocket cost before insurance applies describes the deductible, which is the amount one must pay before insurance starts covering costs, rather than the shared payment after that point.