What is coinsurance in Medicare?

Coinsurance in Medicare refers to the portion of the approved amount that the beneficiary is responsible for paying after meeting their deductible. In Medicare, after the deductible is satisfied, the program typically pays a certain percentage of the approved charges for covered services. The beneficiary then pays the remaining percentage, which is known as coinsurance.

For example, if Medicare covers 80% of a service, the beneficiary would have to pay the remaining 20% as coinsurance. This system is in place to share costs between the insurance provider and the insured party, ensuring that beneficiaries have some financial responsibility while still benefiting from significant coverage.

The other options present variations or misunderstandings of how coinsurance functions within the Medicare framework. While one choice mentions a fixed percentage, coinsurance is generally based on the approved amount for each service rather than a flat rate. Another option incorrectly describes coinsurance as a total out-of-pocket expense, which fails to capture the shared nature of cost responsibility in Medicare services.