Co-insurance is calculated based on what?

Co-insurance is defined as the percentage of the covered healthcare expenses that a patient is responsible for after their deductible has been met. This typically means that when a patient requires medical services, the insurance company pays a certain percentage of the total allowed amount for the procedure or treatment, while the patient pays the remaining percentage, which is termed co-insurance.

When co-insurance is calculated, it is done based on a percentage of the charges associated with the services provided, not the total billed amount or a flat fee. Understanding this distinction is crucial; the total billed amount may include non-covered expenses, while the percentage of charge refers to what is actually covered under the patient’s insurance plan. Therefore, co-insurance is directly tied to the agreed-upon charges between the healthcare provider and the insurance company, and patients must fulfill their payment duties based on this established percentage.

This focus on the percentage ensures patients understand their financial responsibility regarding specific healthcare services. The other choices do not accurately reflect how co-insurance operates, as they refer to different payment structures or guidelines.