Which of the following best describes coinsurance?

Coinsurance is best described as a percentage of costs shared between the insurer and the policyholder. This means that after the deductible has been met, both the insurer and the insured share the costs of covered healthcare expenses. For instance, if your insurance plan has a coinsurance rate of 20%, you would be responsible for paying 20% of the covered medical expenses after the deductible, while the insurance company would pay the remaining 80%.

This method of cost-sharing is important as it encourages the policyholder to be more judicious in their healthcare choices, knowing that they bear part of the financial burden. It contrasts with a fixed fee or copayment, which is a specific amount paid for each service regardless of total charges, thereby creating a different financial dynamic in how healthcare services are accessed and utilized.

The other responses describe different concepts like copayments, out-of-pocket maximums, or deductibles, which are distinct from coinsurance. A copayment involves a set fee for a service, an out-of-pocket maximum is the total annual limit a policyholder pays before insurance covers 100% of costs, and a deductible is the initial amount the insured must pay before their insurance begins to cover costs.