What does co-insurance refer to in health insurance?

Co-insurance in health insurance is defined as the percentage of costs the insured pays after reaching their deductible. Once an insured individual has satisfied their deductible—the initial amount they must pay out of pocket for healthcare services—the co-insurance kicks in. This means that for any additional costs incurred for medical treatment, the insured will pay a predetermined percentage while the insurer covers the remaining percentage.

For example, if the co-insurance rate is 20%, after the deductible is met, the insured will pay 20% of the costs for covered services, and the insurance company will cover the remaining 80%. This structure encourages insured individuals to take an active role in their healthcare spending, as they share some of the cost burden with the insurer.

The other options describe different components of health insurance. The total amount an insurer will pay for a claim relates only to policy limits and not to the co-insurance concept. The amount paid by the insurer directly to the provider pertains to how insurance payments are processed, rather than the cost-sharing aspect described by co-insurance. Similarly, a fixed amount paid for each visit to a healthcare provider refers to co-payment, which is a distinct concept where the insured pays a set fee for each service rather than a percentage of costs.