Updated on - 12 May 2026
In a health insurance policy, the coinsurance clause depicts the fixed percentage of costs of a covered healthcare service that you must pay after you've paid your deductible. For instance, if your mediclaim policy document states that you must pay 20% of the medical bill as coinsurance, you are liable to pay this fixed percentage while your insurer will pay the remaining 80%.
This cost-sharing ratio remains in effect until you reach your out-of-pocket maximum. The insurance company bears the related medical expenses thereafter. Coinsurance, vital to the overall scheme of health insurance, serves as a mechanism by which healthcare costs are shared between the policyholder and the insurer.
What is Coinsurance in Health Insurance?
Coinsurance is a cost-sharing mechanism and is separate from any out-of-pocket limits defined in the policy. The coinsurance clause stipulates a fixed percentage, which is mentioned clearly in the policy document. This percentage aligns with the maximum out-of-pocket expenses you can incur annually before your insurance covers the rest. For instance, you get hospitalised, and the medical bill comes to INR 20,000. If the policy states that you must pay 20% of the total amount as coinsurance, you must pay INR 4,000, while your insurer will settle the remaining 80% (i.e., INR 16,000) of the billed amount.
Although the coinsurance percentage remains intact, policyholders must first meet their deductible before coinsurance applies.
Difference between Copay and Coinsurance
Copay in health insurance refers to the fixed portion of total medical treatment costs that a policyholder must pay. However, the remaining expenses are borne by the insurer. The policyholder must pay a fixed amount or percentage of the total cost.
Copay and coinsurance differ in various aspects.
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Aspect
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Copay
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Coinsurance
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Payment Type
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Fixed amount
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Fixed percentage of total cost
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When Paid
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At the time of service
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After deductible (if applicable)
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Variability
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Same amount each time
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Varies based on total bill
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Example
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₹500 per visit
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20% of the total bill
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Common in India
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Very common
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Less common but present in some policies
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Differences between Coinsurance and Deductible
A deductible is a fixed amount that a policyholder must pay before the insurer begins to contribute towards medical expenses. For example, if your policy has a deductible of ₹5,000, you will need to pay treatment costs up to this amount first. After that, the insurer covers eligible expenses as per the policy terms, though additional cost-sharing like copay or coinsurance may still apply.
Deductibles differ from coinsurance payments on a few criteria:
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Aspect
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Coinsurance
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Deductible
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Meaning
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Share of costs (percentage)
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Fixed amount paid before the insurer contributes
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When Paid
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After deductible (if applicable)
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Before coverage starts
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Amount Type
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Variable (depends on bill)
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Fixed amount
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Payment Frequency
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Applies to each claim
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Usually once per policy year (or per claim, as per policy)
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Risk
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Higher if bills are large
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Limited to a fixed amount
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Liability After Payment
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Costs may continue via coinsurance or non-covered expenses
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Does not eliminate further costs; coinsurance or exclusions may still apply
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Conclusion
Coinsurance in health insurance ensures that financial responsibilities are distributed fairly by splitting the expenses after you pay the deductible. Coinsurance determines the share of expenses you pay during a claim.
Knowing this enables you to better manage your funds and prevent surprises. You may make sure that cost-sharing is clear by going over the terms of your health insurance plans.
FAQs
1. Does coinsurance apply to all claims?
No. The terms of the policy, the type of treatment, and any particular conditions specified in your plan will determine if it is applicable.
2. Is coinsurance mandatory?
No, not all policies have coinsurance. While some plans include coinsurance to offset premium expenses, others may provide complete coverage without requiring any cost-sharing.
3. Can I reduce coinsurance impact?
By picking policies that minimise coinsurance, choosing plans with reduced cost-sharing, or choosing greater coverage levels, you can lessen the financial burden.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. Please read the sales brochure/policy wordings carefully for detailed information about on risk factors, terms, conditions and exclusions. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.