What Is Coinsurance in Health Insurance?

Key Takeaways

Co-insurance in health insurance is what you pay as a percentage of covered costs after your deductible is met.

Most ACA plans use an 80/20 split, meaning your insurer pays 80% and you pay 20% per service.

Once you reach your out-of-pocket maximum, your insurer covers 100% of covered costs for the rest of the year.

Your co-insurance rate varies by plan tier, service type and whether your provider is in-network.

What Does Co-insurance Mean?

Co-insurance is the percentage of a covered medical bill you pay after your deductible is met. Your insurer pays the rest. On an 80/20 plan, you pay 20% of each covered service's allowed amount and your insurer covers the other 80%. But not every service triggers the same co-insurance rate. Your insurer must provide a Summary of Benefits and Coverage under Affordable Care Act (ACA) rules, which lists each service category and its specific rate.

Once you reach your out-of-pocket maximum, your insurer covers 100% of costs for the rest of the year. The ACA set the 2026 out-of-pocket maximum at $10,600 for individual coverage and $21,200 for family coverage, per Centers for Medicare & Medicaid Services (CMS).

Examples of Co-insurance

Co-insurance costs vary by plan tier and service type. Bronze-tier plans carry the highest rates and the lowest monthly premiums, while Platinum plans carry the lowest rates and the highest premiums. Because co-insurance is percentage-based, a hospital stay costs far more than a routine visit even at the same rate. Each scenario below uses a different split to reflect how ACA plan tier choice directly affects what you owe.

Hospital Stay (Split: 80/20 | Gold-tier plan)

You're admitted for a 2-night stay after your annual deductible is already met. On a Gold-tier 80/20 plan, your insurer covers $4,000 and you owe $1,000. Gold plans carry an 80% actuarial value, meaning your insurer covers 80% of covered costs across the plan year. They cost more each month than Bronze or Silver plans but reduce what you pay per service.

Specialist Visit (Split: 60/40 | Bronze-tier plan)

A cardiologist visit costs $300 in allowed amount. On a Bronze-tier 60/40 plan, your insurer covers $180 and you pay $120. Bronze plans carry a 60% actuarial value, the lowest of the four main ACA tiers. They have the lowest monthly premiums but the highest co-insurance rates, a better fit for enrollees who rarely use care over the full plan year.

Emergency Room Visit (Split: 50/50 | Out-of-network rate)

You visit an out-of-network emergency room. Your plan's in-network rate is 80/20, but out-of-network care triggers a 50/50 split. At that rate, you owe $1,250 on a $2,500 allowed amount. Out-of-network co-insurance costs can also fall outside your in-network out-of-pocket maximum depending on your plan's terms, raising your true annual exposure above your in-network cap.

Lab Work and Imaging (Split: 90/10 | Platinum-tier plan)

Your doctor orders blood work and imaging. On a Platinum-tier 90/10 plan, your insurer covers $720 and you pay $80. Platinum plans carry a 90% actuarial value, the highest of the ACA tiers. They have the highest monthly premiums but the lowest co-insurance rates, reducing per-service costs for enrollees who use diagnostic services, specialist care or prescription drugs regularly.

Mental Health Visit (Split: 70/30 | Silver-tier plan)

A weekly therapy session costs $200 in allowed amount. On a Silver-tier 70/30 plan, you pay $60 per session after the deductible is met. Under ACA mental health parity rules, your plan's co-insurance rate for mental health visits must equal its rate for comparable medical or surgical services. A plan can't charge you more for therapy than for a primary care visit.

How Does Co-insurance Work?

Co-insurance doesn't apply from the first bill of your plan year. It takes effect only after your annual deductible is fully paid, and your cost share stops once you reach your out-of-pocket maximum. Many enrollees assume co-insurance starts immediately, which leads to billing surprises early in the year. ACA cost-sharing works in three stages: your deductible, then co-insurance and then your out-of-pocket maximum cap.

Your Deductible Comes First

Co-insurance doesn't apply until your annual deductible is fully paid. Every dollar you spend on covered services counts toward that deductible, but your insurer doesn't share costs until you've met the threshold. For 2026, ACA deductibles vary by plan tier, with Platinum plans carrying the lowest deductibles and Bronze plans carrying the highest, per CMS.

Co-insurance Takes Effect After Your Deductible

Once your deductible is met, co-insurance takes effect for each covered service. Your insurer calculates the allowed amount for that service, then applies the split in your plan. On an 80/20 plan, you pay 20% of the allowed amount and your insurer pays 80%. That percentage stays consistent for each service in that category for the rest of your plan year.

Your Out-of-Pocket Maximum Stops Your Costs

Every ACA plan must set an annual out-of-pocket maximum. For 2026, that cap is $10,600 for individual coverage and $21,200 for family coverage, per CMS. Once your combined deductible, co-insurance and copay payments reach that cap, your insurer pays 100% of covered costs for the rest of the plan year. Your monthly premium doesn't count toward the cap.

In-Network vs. Out-of-Network Co-insurance

Your plan's standard co-insurance rate applies to in-network providers. Out-of-network care usually carries a higher co-insurance rate, and a separate out-of-network deductible may apply. Health maintenance organization (HMO) plans don't cover out-of-network care at all outside of emergencies. No co-insurance applies in those cases, and no coverage applies either.

What Are the Differences Between Co-insurance, Copay and Deductible?

Co-insurance, copay and deductible are all cost-sharing tools built into health insurance plans. Each applies at a different point in your plan year and calculates your share differently. Mixing them up leads to billing surprises and poor plan selection. The dollar amount, timing and calculation method differ for each.


Co-insurance	Your percentage share of a covered service cost	After your deductible is met	% of allowed amount (e.g., 20% of $500 = $100)
Copay	A flat fee for a covered service	Usually at time of service, sometimes before deductible is met	Fixed dollar amount (e.g., $30 per visit)
Deductible	The total you pay before your plan starts sharing costs	Start of each plan year, before co-insurance applies	Fixed dollar amount paid in full (e.g., $1,500 per year)

IS IT BETTER TO HAVE COPAY OR CO-INSURANCE?

Copays give you a fixed, predictable cost per visit, which makes budgeting easier if you use care frequently. Co-insurance ties your cost to the price of the service, so it's cheaper on low-cost visits but more expensive on high-cost ones like surgery or hospital stays.

Pros and Cons of Co-insurance

Co-insurance benefits some enrollees and costs others more than a flat copay structure. Whether it works for you depends on how often you use care and what those services cost. Plans with lower co-insurance rates often carry higher premiums. Plans with higher rates lower your monthly costs but raise your per-service share. And neither structure is universally better, which is why understanding the tradeoffs before open enrollment matters.

Benefits and Disadvantages

Lower premiums on plans with higher co-insurance rates reduce monthly costs for healthy, low-use enrollees
Your cost is proportional to the service price, so routine visits cost less than high-cost procedures
Co-insurance stops at your out-of-pocket maximum, capping your total annual exposure
Percentage-based structure makes it easier to estimate costs for planned procedures in advance

High-cost services like hospital stays can result in large co-insurance bills
Two separate cost thresholds (your deductible and co-insurance) apply before your insurer covers its full share
Out-of-network care often carries a higher co-insurance rate, sometimes with no cap on your costs
Harder to budget than a flat copay when service prices vary widely

Is It Better to Have Low or High Co-insurance?

Neither low nor high co-insurance is the right choice for every enrollee. Low co-insurance means you pay less per service but often owe higher monthly premiums. High co-insurance lowers your premium but raises your share each time you use care.

The right answer depends on your annual health care spending patterns, not just your monthly budget. Your expected care frequency and your plan's cost structure both determine which option costs less over a full plan year.


You have a chronic condition requiring frequent care	Low	Per-service costs add up fast; lower co-insurance saves money across the full plan year
You're healthy and rarely need care	High	You use little care, so lower premiums save more than you'd spend on co-insurance
You're planning a surgery or major procedure	Low	A single large bill at 20% vs. 40% creates a large dollar difference
You're on a tight monthly budget	High	Lower premiums cut fixed monthly costs even if per-service costs are higher
You use mental health or specialist care regularly	Low	Repeated visits at a lower percentage keep your annual out-of-pocket total manageable

What Is Co-insurance: FAQ

We've answered the frequently asked questions about co-insurance in health insurance here, so you know exactly what you'll pay and when it applies:

What does 30% co-insurance mean for health insurance?

With 30% co-insurance, you pay 30% of the allowed amount for each covered service after your deductible is met. Your insurer pays the remaining 70%. On a $1,000 service, you owe $300.

What does 80% co-insurance mean?

With 80% co-insurance, your insurer pays 80% of covered costs and you pay 20% after your deductible. On a $500 service, you owe $100.

Will I always have to pay co-insurance when I need health care services?

Co-insurance only applies after your deductible is met. Preventive care covered under ACA rules, such as annual wellness visits, requires no co-insurance or deductible payment.

Are there plans without co-insurance?

Yes. Some plans use flat copays for all services instead of co-insurance. HMO plans with copay-only cost-sharing are one example. Check your plan's Summary of Benefits and Coverage to confirm.

Will my co-insurance vary depending on the type of service?

Most plans assign different co-insurance rates to primary care visits, specialist appointments, hospital stays and prescription drugs. Your Summary of Benefits and Coverage document lists each service's specific rate.

Will my co-insurance be higher if I see an out-of-network provider?

Out-of-network co-insurance rates are higher than in-network rates on most plans, and a separate out-of-network deductible may apply. HMO plans don't cover out-of-network care at all outside of emergencies.

Do Medicare Advantage plans have co-insurance?

Medicare Advantage plans use co-insurance for many services, with rates varying by plan and service type. For 2026, standard Medicare Part B co-insurance is 20% of the Medicare-approved amount after the Part B deductible, per CMS.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

He writes about economics and insurance, breaking down complex topics so people know what they're buying.

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