What is coinsurance in the context of healthcare insurance?

Coinsurance is defined as a cost-sharing arrangement in healthcare insurance where the insured is responsible for paying a certain percentage of the total healthcare costs after any applicable deductible has been met. This setup is meant to share financial responsibility between the insurer and the insured, encouraging patients to make more cost-conscious healthcare decisions since they will bear a portion of the costs for their care.

For example, if a healthcare plan includes a coinsurance rate of 20%, and the insured has met their deductible, the insured would pay 20% of the total medical bill for services received, while the insurance company would cover the remaining 80%. This mechanism also helps insurers manage risk by ensuring that consumers have a stake in the costs associated with their healthcare usage.

In contrast, the other options describe different concepts in insurance or healthcare. A fixed fee for each service is more aligned with copayment structures, while a policy that covers all expenses regardless of cost would imply a lack of cost-sharing, which is not characteristic of a coinsurance model. Lastly, coverage after a policy limit is reached refers to excess coverage or primary insurance features, which do not encompass the coinsurance arrangement.