New York Child Abuse Identification and Reporting Practice Exam

What does coinsurance in health insurance policies refer to?

1. The insurer pays 100% of expenses after the deductible

2. The insurer and the insured share expenses over the deductible

3. The insured pays all costs until a maximum limit

4. No costs are shared if the deductible is not met

The correct answer is: The insurer and the insured share expenses over the deductible

Coinsurance in health insurance refers to the shared expenses between the insurer and the insured after the deductible has been met. It typically involves the insured paying a certain percentage of the covered healthcare costs while the insurance company pays the remainder. For instance, if a policy has a coinsurance rate of 20%, after the deductible is satisfied, the insured would be responsible for 20% of the costs of any additional services, with the insurer covering the remaining 80%. This arrangement is designed to encourage cost-sharing and help manage healthcare expenses for both the insurer and the insured.