Principles of Risk Management and Insurance, 13th Edition

Coinsurance in Health insurance

Health insurance contracts typically contain a coinsurance percentage clause, which is a provision that requires the insured to pay a specified percentage of covered medical expenses in excess of the deductible. In particular, individual and group medical expense policies typically have a coinsurance provision that requires the insured to pay a certain percentage of covered medical expenses in excess of the deductible up to some specified annual limit. A typical plan requires the insured to pay 20, 25, 30 percent, or some higher percentage, of covered expenses in excess of the deductible up to a maximum annual limit. For example, assume that Megan has covered medical expenses in the amount of $51,000, and that ...