In health insurance policies, what does "coinsurance" mean?

Coinsurance refers to the percentage of costs that the insured is responsible for paying after they have met their deductible. In health insurance, after the insured has paid their deductible, they share the costs of covered services with the insurance company according to a specified percentage. For example, if a health insurance policy has a coinsurance rate of 20%, the insurer pays 80% of covered medical expenses, while the insured pays the remaining 20%. This arrangement helps to control healthcare costs for insurers while encouraging insured individuals to be mindful of their healthcare expenses.

The other answers relate to different aspects of insurance. The total premium paid by the insured reflects their regular payment for coverage, a fixed fee paid for services refers to copayments, and a penalty fee for late payments is associated with financial obligations rather than cost-sharing mechanisms. These options do not describe the shared payment system that defines coinsurance in health insurance policies.