The way coinsurance works is that a policyholder pays the remaining percentage of his health care bills that his insurance provider doesn't pay, according to HowStuffWorks. Coinsurance is separate from a deductible, which a policyholder has to pay before his insurance coverage kicks in and starts to pay a portion of his medical costs.
Depending on the health care plan, a policyholder might not have to pay coinsurance, notes HowStuffWorks. Limits exist on how much out-of-pocket costs a policyholder is responsible for. One of the biggest differences between coinsurance and co-pays is that coinsurance covers a portion of the doctor's fees instead of an amount a person has to pay every time he visits a doctor. Another difference is that co-pays aren't included in the limits for out-of-pocket payments.
If an individual has indemnity insurance, he most likely has to pay a deductible, a co-pay and coinsurance, according to HowStuffWorks. While a policyholder has more freedom about choosing his health care provider and hospital with this insurance plan, he also has to pay more for his health care. With indemnity insurance, a policyholder usually has a coinsurance payment of 20 percent, but there are situations in which he has to pay more.