Coinsurance


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Related to Coinsurance: Coinsurance effect

Coinsurance

In insurance, a structure in which the policyholder and the insurer split the responsibility for paying for covered items. Coinsurance is most common with health and real estate insurance. For example, if a policyholder has surgery that is covered under the plan, coinsurance might require the policyholder to pay 20% and the insurer to pay the remaining 80%. This helps the insurer control costs by avoiding flippant claims, but also provides most of the coverage needed for the policyholder.

Coinsurance.

When your healthcare insurance has a coinsurance provision, you and your insurer divide the responsibility for paying doctor and hospital bills by splitting the costs on a percentage basis.

With an 80/20 coinsurance split, for example, your insurer would pay 80%, or $80 of a covered $100 medical bill, and you would pay 20%, or $20.

Some policies set a cap on your out-of-pocket expenses, so that the insurance company covers 95% to 100% of the cost once you have paid the specified amount.

Coinsurance may also apply when you buy insurance on your home or other real estate. In that case, insurers may require you to insure at least a minimum percentage of your property's value -- usually about 80% -- and may reduce what they will cover if you file a claim but have failed to meet the coinsurance requirement.

Coinsurance also describes a situation in which two insurers split the risk of providing coverage, often in cases when the dollar amount of the potential claims is larger than a single insurer is willing to handle. This type of coinsurance is also called reinsurance.

coinsurance

A method of dividing financial responsibility for a loss between the owner and the insurance company.Coinsurance clauses exist within insurance contracts as a type of penalty for an owner who decides to gamble about the size of any potential loss and insure property for less than the full value in order to keep premiums low.They usually provide that an owner may not collect full policy limits for a loss unless the property has been insured to at least 80 percent of its value.
References in periodicals archive ?
This has the effect of giving the insured leeway on meeting the coinsurance requirement.
The prospective payment rate excludes direct medical education costs, the cost of bad debts for deductibles and coinsurance incurred by beneficiaries, and kidney acquisition costs, which continue to be reimbursed under a reasonable-cost based system.
In the presence of background risk, full-insurance coverage on average requires that the coinsurance rate equals 1, which, by coincidence, coincides with the definition of full insurance coverage in complete markets.
For example, if the insured has a building insured on an ISO commercial property policy, the coinsurance percentage is going to be 80, 90, or 100% of the value of the building (depending on the valuation provision in effect at the time of the loss).
(2018) assessed financial requirements pre- and post-parity among carve-in plans, and found a mix of increases and decreases in copayments and coinsurance among most plans and a lack of evidence mat MHPAEA led to more generous mental health benefits, likely because most employer-provided plans were already at parity pre-MHPAEA.
Researchers noted that if the coinsurance was waived but there was no follow-on increase in the screening rate, the benefits of screening would not change, but the total cost of screening and treatment would increase to $2.726 million per 1,000 people aged 65 years.
As noted by Dionne, Gourieroux, and Vanasse (2001), a significant positive estimate of [a.sub.3] suggests that policyholders with higher claim probabilities are more likely to select an insurance policy without coinsurance, indicating the presence of asymmetric information.
Indeed, for almost 40 percent of the new claims, the $3.50 cost of collecting and processing the coinsurance would exceed the coinsurance liability."
Citigroup Inc (NYSE: C) has announced that it has entered into a coinsurance deal with a subsidiary Swiss Re Life & Health America.
M2 EQUITYBITES-April 1, 2016-Citigroup announces reduction of USD2.5bn with transfer of coinsurance agreement with Primerica to Swiss Re
For a given coinsurance rate, a price decline further lowers the net price, increases excess demand, and exacerbates the welfare loss.
A primary example of this phenomenon is the growing use of coinsurance, where patients pay for a percentage of their drug costs rather than a traditional flat copayment.