What are "co-insurance" provisions in health insurance plans?

Co-insurance provisions in health insurance plans refer to the requirement that policyholders pay a certain percentage of the costs of covered medical services after they have met their deductible. This means that once the deductible is satisfied, the insurance company starts to share the cost of the medical expenses with the insured. For example, if a plan has a co-insurance rate of 20%, after meeting the deductible, the insured would pay 20% of the costs of health care services while the insurance pays the remaining 80%.

This mechanism is designed to lower premium costs while encouraging members to be mindful of their healthcare expenses, as they will have a share in the costs. It contrasts with flat fees or fixed dollar amounts, which do not vary based on the percentage of the total costs, nor does it imply a benefit that does not require any payment at all. Co-insurance is a critical component in structuring how healthcare costs are shared between the insurer and insured, influencing both financial responsibility and healthcare usage behavior.