"What is health insurance coverage" looks at the concept of co-insurance to better understand the technical aspects of health insurance plans.
A co-insurance is a common risk management technique used by health insurance companies to reduce their costs on their health insurance plans. It is often used to control the claims costs made by insured persons by them paying a percentage value themselves of each health insurance claim.
Within the NowCompare health insurance glossary the co-insurance is defined as "the shared amount of money that you are obligated to pay for covered medical services/treatment. In the table of health insurance benefits, you may see something like: "Dental - 20 % Co-Insurance". This means that you must share the cost of dental treatment costs with the Insurer where you will pay 20% of the bill and the medical insurer will pay the remaining 80% subject to you remaining within the benefit limit"
By implementing a co-pay on a health insurance plan, the insurance company is able to not only save expense by passing on a percentage to the client, but their is a consequential saving made on the overall value of the claim. That saving is based upon the fact that the health insurance company has tied their interests and that of the client together by putting it as a percentage. Typically when this happens, the insured person will ensure the overall cost of the claim is not excessive as they prefer to pay less money themselves.
Co-insurance has affectively made the insured person the best advocate for low healthcare costs and their best resource in the overall cost containment process.