Health Plans Pair High Coinsurance With Big Out-of-Pocket Costs

Health plans with the highest average coinsurance rate (above 40%) also have the highest average annual limit on out-of-pocket expenses for enrollees. The coinsurance rate did not track predictably with the average deductibles that consumers pay.

Coinsurance is a common term in the individual and family market as a method of cost sharing for more expensive services, including hospitalization, surgery, child birth, and emergency care. Out of the 9,711 plans examined, a quarter of plans with coinsurance rates were higher than the national average. The lowest range of up to a 10% coinsurance rate corresponded to an average out-of-pocket limit of $4,286 while the highest range of above 40% corresponded to an average limit of $8,825.

The Affordable Care Act (ACA) will prevent companies from offering plans with some of the outer limits of these costs, but in some instances, consumers may face even higher deductibles and out-of-pocket costs than the average plan.

Kev Coleman, head of Research & Data at HealthPocket said, “This is definitely a situation of buyer beware, particularly if people assume that a plan with a low premium but high coinsurance translates into less money out of their pockets in a given year. A serious medical episode could completely change the financial affect of the health plan.”

Starting in 2014, cost transparency will be even more critical since health plans will be designed around the percentage of medical costs the consumer is expected to pay. Consumers will need to understand how much of their costs their health plan covers and what their healthcare providers charge for services.

Using figures from a study by the Kaiser Family Foundation, the analysis compared average costs for individual and family plans with some potential designs for the upcoming Bronze and Silver plans offered under the ACA. A Bronze Plan with the same coinsurance rate as the national average was found to have a higher deductible and out-of-pocket limit than the average plan. A Silver Plan using the same coinsurance rate as the national average had a higher out-of-pocket limit but significantly lower deductible.

All plans under the ACA will include their deductibles as part of the out-of-pocket limits, making it easier for consumers to better estimate their costs, and more services will be covered under these plans than the comparison plans. For more information, visit,

Last Updated 05/25/2022

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