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What does Coinsurance mean in medical insurance policies?

  1. The total amount payable out of pocket before benefits kick in

  2. The percentage of expenses shared between the insured and the insurance company after the deductible is met

  3. The fixed cost for each medical visit

  4. The annual premium payment structure

The correct answer is: The percentage of expenses shared between the insured and the insurance company after the deductible is met

In medical insurance policies, coinsurance refers to the arrangement where after the insured has met their deductible, both the insured individual and the insurance company share the costs of covered medical expenses. This sharing is typically represented as a percentage, such as 80/20 or 70/30, indicating that the insurance company pays a certain percentage while the insured is responsible for the remainder. This system ensures that insured individuals have some financial responsibility for their medical costs, which can help control healthcare expenses for both the insurance provider and the insured. The other options provided do not accurately define coinsurance. The total amount payable out of pocket before benefits kick in refers to the deductible. A fixed cost for each medical visit describes a copayment. Lastly, the annual premium payment structure pertains to the payments made to maintain the insurance policy, rather than the sharing of costs after services are rendered. Understanding these distinctions is important for managing medical expenses and recognizing how health insurance policies are structured.