PSI Ohio Insurance Practice Exam

Which of the following best defines "co-insurance" in health insurance?

1. The share of costs covered by the insured after the deductible is met.

2. A fixed amount the insured pays per visit.

3. The total amount paid by the insurer.

4. The percentage the insurer pays after coverage limits.

The correct answer is: The share of costs covered by the insured after the deductible is met.

Co-insurance refers to the arrangement where the insured pays a certain percentage of the costs of a covered healthcare service after the deductible has been satisfied. This means that once the insured has met their deductible, they will share in the costs of their medical care, often splitting the expenses with their insurance company according to a predetermined ratio. For example, if a health policy includes a co-insurance provision of 20%, this means the insured will pay 20% of the eligible costs of care, while the insurer will cover the remaining 80%. This structure encourages the insured to be more conscious of their healthcare expenses, as they have a direct financial stake in the cost of services utilized. The other options do not accurately define co-insurance. A fixed amount per visit aligns more with a copayment, which is a distinct concept in health insurance. The total amount paid by the insurer does not address the insured's share of costs, and the percentage the insurer pays after coverage limits is more aligned with policy limits than with the concept of co-insurance.