Coinsurance Maximum Law and Legal Definition

Coinsurance maximum is the total amount of coinsurance that a member is obliged to pay before a health plan begins paying 100% of covered medical expenses per benefit period. Coinsurance is an arrangement whereby the insured person pays a fixed percentage of the cost of medical care after the deductible has been paid. Following is an example to illustrate coinsurance maximum: Assume that an individual becomes member of a plan for $50,000 with $2000 as its premium amount, 80% coinsurance and $4000 coinsurance maximum. 80% coinsurance means 80% will be paid by the insurance company and 20% must be paid by the member. Once all the 20% coinsurance amounts the member pay equals the coinsurance maximum of $4,000, the carrier pays 100% for the rest of the calendar year for covered expenses.

In short, this is the maximum dollar amount of covered expenses for which a member is responsible in a calendar year. After that maximum is reached, the plan will pay 100% of covered expenses incurred during the remainder of that calendar year.