What is Cost Sharing in Health Care? (2024)

In health care, cost sharing refers to the amounts you pay before your insurance plan starts paying for covered services. These costs include deductibles, copayments and coinsurance.

Health plans typically negotiate how much they will pay for the services of doctors, hospitals and other health care providers in their networks. The amount you owe (for example, 20% coinsurance) is based on the allowed amount or negotiated rate.


A deductible is a certain amount of money that you must pay out-of-pocket before the insurance company starts to reimburse you for medical expenses. It can vary from plan to plan, but typically resets each year.

A low deductible is helpful for those who need frequent health care services, like someone who has a chronic illness or a large family. It also makes sense for people who have a lot of money saved up in savings.

A deductible is a key feature in a health insurance plan. It determines how much you pay out-of-pocket for health care services, which can be a major factor in choosing an insurance plan.


A copayment is a fixed amount that you pay for a health care service, such as a doctor visit or an urgent care visit. These amounts may or may not count toward your deductible, and they will vary by insurance plan and type of service.

Most health insurance plans have copayments for doctor visits and prescription drugs. They also have separate copays for lab tests and other services.

For example, a copayment for a doctor's office visit may be $20, while a copayment for an urgent care center visit might be $40. These costs are set by your insurance company and will appear on your medical card, as well as on your Blue Cross ID card.


Coinsurance is one of the most common forms of cost sharing in health care. It's a percentage of the cost for covered medical services that you and your insurance plan share until you reach your deductible, then the insurer covers the rest.

The amount you pay for coinsurance depends on what kind of service or prescription drug you get. It also varies by whether the professional is in or out of your health insurance network.

You can learn the coinsurance percentage of any medical service or prescription drug from the Explanation of Benefits (EOB) your insurance company sends to you after you receive treatment or a prescription. For in-network services, you'll typically pay 10% or less.

For out-of-network services, you'll typically have to pay more, and your coinsurance rate will increase. For example, a 20% coinsurance rate for an in-network doctor might jump to 30% or 40% for an out-of-network provider.

Out-of-pocket maximum

Cost sharing in health care is the first part of a health insurance plan that a person must pay before insurance starts to cover health services. This cost-sharing usually takes the form of copayments, deductibles and coinsurance.

Deductibles are a fixed amount that a person must pay for each doctor visit, surgery, hospital stay and other services before insurance starts to cover a portion of the bill. After a person hits their deductible, the insurance company pays 100 percent of the costs for covered health services.

Out-of-pocket maximums are an important safety net for people who have high medical expenses. They help people avoid spending large amounts of money on a single unexpected medical expense and protect them from paying for care that is not needed or not appropriate for their needs. However, how these maximums are set is uncertain. It depends on how overall prices and employer-based health insurance premiums grow over time.

What is Cost Sharing in Health Care? (2024)
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