In a health plan with 80/20 coinsurance after the deductible is met, the insured's 20 percent share represents:

Why A is correct

Coinsurance is a cost-sharing feature in which the insured and the insurer split covered expenses in stated percentages once the deductible is satisfied. In an 80/20 plan, after the deductible, the insurer pays 80 percent of covered expenses and the insured pays 20 percent, until the plan's out-of-pocket maximum is reached. It differs from a copayment, which is a fixed dollar amount per service, and from the deductible, which is an annual threshold paid before coinsurance starts. Understanding how the deductible, coinsurance, and maximum out-of-pocket interact is a core contract-provision topic for medical expense plans (AH-III.A.1d).

Why the other options are wrong

• B) The deductible is the insured's obligation and is paid before any benefits begin. Coinsurance percentages describe how the covered expenses above the deductible are split between the insurer and the insured, so they do not address who absorbs the deductible.
• C) The premium is the price of coverage, paid periodically to keep the policy in force, and it is unrelated to the coinsurance percentage. Coinsurance is a claim-time cost-sharing feature applied to covered expenses, not a component of the premium bill.
• D) Coinsurance is a percentage split of actual covered expenses, not a fixed administrative fee, and it applies only when a claim is paid. A fixed fee per claim would not vary with the amount of covered expenses, which is how coinsurance operates.

Memory hook

80/20 coinsurance after the deductible: insurer pays 80, insured pays 20.