Coinsurance: Medicare Cost-Sharing and How It Works

Medicare coinsurance is the portion of a medical bill that a Medicare beneficiary is responsible for paying. Learn more how coinsurance works.

There are a number of words and terms related to the way Medicare works, and one of the most important ones to know is coinsurance.

What is Medicare coinsurance?

Coinsurance is the percentage of a medical bill that you (the Medicare beneficiary) may be responsible for paying after reaching your deductible. Coinsurance is a form of cost-sharing; it's a way for the cost of care to be split between you and your provider. 

The deductible is the amount you are required to pay in a given year or benefit period before Medicare begins paying its share.

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How does Medicare coinsurance work?

Let’s use an example to explain it more clearly.

John has Original Medicare (Part A and Part B) and goes to the doctor for outpatient treatment.

John’s doctor appointment is covered by Medicare Part B, and his doctor bills Medicare for $300. Part B carries an annual deductible of $240 (in 2024), so John is responsible for the first $240 worth of Part B-covered services for the year.

After reaching his Part B deductible, the remaining $60 of his bill is covered in part by Medicare, though John will be required to pay a coinsurance cost.

Medicare Part B requires beneficiaries to pay a 20 percent coinsurance payment after reaching their deductible. This means that John will pay 20 percent of the remaining $60 of his bill, and Medicare Part B will cover 80 percent.

The total amount that John will have to pay for his appointment is $252, broken down as follows:

Calculating John's Medicare Coinsurance
Total medical bill $300
2023 Part B deductible $240
20 percent Part B coinsurance of remaining $60 $12
Total beneficiary will pay $252

How much is Medicare coinsurance?

Medicare coinsurance is typically 20 percent of the Medicare-approved amount for goods or services covered by Medicare Part B.

So once you have met your Part B deductible for the year, you will then typically be responsible for 20 percent of the remaining cost for covered services and items.

The Medicare-approved amount is a predetermined amount of money that Medicare has agreed to pay for a covered service or item. 

Private Medicare plans, such as Medicare Advantage and Medicare Part D Prescription Drug Plans (PDP), may feature coinsurance of their own.

While 20 percent is the typical coinsurance amount for Medicare Advantage plans, some plans may feature a 70-30 or 90-10 split.

Medicare Prescription Drug Plans may feature coinsurance or copay amounts that vary depending on the type of drug and what tier that drug is in, according to your Medicare drug plan formulary.

Why does Medicare charge coinsurance?

Cost-sharing measures such as coinsurance (and copays, which you can read more about below) are a way to help keep beneficiaries accountable for their care costs.

With no coinsurance in place, a patient could potentially visit a doctor more frequently for unnecessary health care services after they meet their deductible, because they would pay nothing out-of-pocket for the services.

This would leave the insurance plan carrier to cover all costs of such unnecessary care, which would drive up plan costs for other beneficiaries and contribute to overburdening the health care system.

Cost-sharing is one way of helping ensure that patients are more selective about the type of care they seek. 

Coinsurance vs. copays

Copayment, or copay, is another term you’ll see used in relation to Medicare cost-sharing. A copay is like coinsurance, except for one difference: While coinsurance typically involves a percentage of the total medical bill, a copayment is generally a flat fee.

For example, Part B of Medicare uses coinsurance, which is 20 percent in most cases. But Medicare Part A uses copayments for hospital stays, which begin at $408 per day for days 61-90 of an inpatient hospital stay in 2024.

The primary difference between coinsurance vs. copays is that copayments are a flat fee amount instead of a percentage.

Get coverage for Medicare coinsurance

One way you can get some coverage for Medicare coinsurance is by purchasing Medicare Supplement Insurance.

Medicare Supplement Insurance plans (also called Medigap) are optional plans sold by private insurers that offer some coverage for certain out-of-pocket Medicare costs, such as coinsurance, copayments and deductibles.

In exchange for paying a monthly premium to belong to the plan, a Medigap plan can help cover the cost of your Medicare coinsurance and/or your deductibles.

If John from our above example had a Medigap plan that covered his Part B deductible and coinsurance, he may have owed nothing for his doctor’s appointment.

Medicare Advantage plans typically include coinsurance

Many Medicare beneficiaries choose to get their benefits through a privately-sold Medicare Advantage plan (Medicare Part C), which provides the benefits of Original Medicare combined into one plan.

Many Medicare Advantage plans may also offer benefits not found in Original Medicare. 

While a Medicare Advantage plan will likely include coinsurance costs, a plan could help you save on some of your other out-of-pocket health care costs, which could help offset some of your coinsurance payments.

To learn more about Medicare Advantage and to compare the plan options available in your area, call to speak with a licensed insurance agent today.

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About the author

Christian Worstell is a senior Medicare and health insurance writer with He is also a licensed health insurance agent. Christian is well-known in the insurance industry for the thousands of educational articles he’s written, helping Americans better understand their health insurance and Medicare coverage.

Christian’s work as a Medicare expert has appeared in several top-tier and trade news outlets including Forbes, MarketWatch, WebMD and Yahoo! Finance.

Christian has written hundreds of articles for that teach Medicare beneficiaries the best practices for navigating Medicare. His articles are read by thousands of older Americans each month. By better understanding their health care coverage, readers may hopefully learn how to limit their out-of-pocket Medicare spending and access quality medical care.

Christian’s passion for his role stems from his desire to make a difference in the senior community. He strongly believes that the more beneficiaries know about their Medicare coverage, the better their overall health and wellness is as a result.

A current resident of Raleigh, Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism.

If you’re a member of the media looking to connect with Christian, please don’t hesitate to email our public relations team at

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