I Have Full Coverage Medical Insurance — So What Are Deductible and Coinsurance?
Many people assume that having “full coverage” health insurance means you will never have to pay anything out of pocket. In reality, health insurance in the United States has several important cost-sharing terms you must understand. Two of the most important are
Deductible and
Coinsurance.
What Is a Deductible?
A deductible is the amount you must pay yourself before your insurance company begins covering medical costs. For example, if your plan has a $1,000 deductible, it means the first $1,000 of your medical expenses each year must come from your own pocket.
Once you meet that amount, the insurance company will start paying its share.
What Is Coinsurance?
After you have paid your deductible in full, coinsurance begins. Coinsurance is a cost-sharing arrangement where you pay a percentage of the remaining medical bills, and the insurance company pays the rest. If your coinsurance is 20%, it means you pay 20% of the approved costs, and your insurance covers the remaining 80%.
A Simple Example
Imagine your surgery costs $5,000.
Deductible amount: $1,000 — you pay this first.
Remaining amount: $4,000.
Coinsurance: 20% — meaning you pay $800, and the insurance company pays the remaining $3,200.
So your total out-of-pocket cost becomes $1,800.
Why This Matters
“Full coverage” does not mean your insurance pays for every dollar. Almost every plan includes a deductible and coinsurance. Understanding these terms helps you avoid surprises during medical treatment and plan your finances better.
Always review your insurance card or policy to confirm:
- how much your deductible is
- what percentage your coinsurance is
- when these costs apply
Knowing this information ahead of time ensures you stay prepared and avoid unexpected medical bills.
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