Question 7

Coinsurance is a percentage paid for covered expenses by the insured and insurer after the deductible is satisfied.

Coinsurance refers to the arrangement where, after the insured has paid their deductible, they and the insurer share the costs of covered healthcare expenses as a percentage. In this case, the correct description is that it is a percentage paid for these expenses by both parties.

A) a percentage of the cost for covered expenses paid by more than one insurer.

This option incorrectly suggests that coinsurance involves multiple insurers sharing costs, which is not the standard definition of coinsurance. Typically, coinsurance is a cost-sharing arrangement between the insured and a single insurer, not involving multiple insurers.

B) a portion of the premium paid by the insured and insurer for each covered service.

This choice describes premium payments, not coinsurance. Coinsurance specifically relates to the costs incurred after a service is provided, while premiums are the payments made to maintain the insurance policy itself.

C) a payment shared by the insured and provider of covered service minus the deductible.

While this option mentions a shared payment, it inaccurately states that the payment is shared with the provider instead of the insurer. Coinsurance payments are made to the insurer for covered services after the deductible has been met.

D) a percentage paid for covered expenses by the insured and insurer after the deductible is satisfied.

This statement accurately defines coinsurance, indicating that both the insured and the insurer pay a percentage of the covered costs once the deductible has been fulfilled. This reflects the true nature of coinsurance in health insurance plans.

Conclusion

Option D clearly and accurately defines coinsurance as a cost-sharing mechanism that occurs after the deductible is met, involving both the insured and the insurer. Options A, B, and C fail to capture the essence of coinsurance, either misrepresenting it or confusing it with other aspects of health insurance. Therefore, D is the only correct answer that aligns with the established definition.