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A coinsurance clause, as used in health insurance, requires insureds to

Rationale

pay a percentage of incurred medical expenses, usually above a deductible.

Coinsurance is a provision in health insurance that mandates the insured to share the cost of covered medical expenses with the insurer after the deductible has been met. This typically involves paying a specified percentage of the costs, ensuring that both the insurer and the insured contribute to the expenses.

A (carry insurance coverage equal to 100% of estimated medical expenses.) YOUR ANSWER

This option misrepresents the purpose of coinsurance. Coinsurance does not require insureds to carry full coverage equivalent to estimated medical costs; rather, it stipulates sharing costs after a deductible is met, reflecting a partnership in risk between the insurer and the insured.

B (purchase the needed insurance from two or more different companies.) YOUR ANSWER

This choice is irrelevant to the concept of coinsurance. It implies a multi-policy approach rather than addressing the cost-sharing aspect after a deductible. Coinsurance relates specifically to how costs are divided for covered services within a single policy.

C (pay a percentage of incurred medical expenses, usually above a deductible.) CORRECT

This accurately describes the essence of coinsurance. After fulfilling the deductible requirements, the insured is responsible for paying a certain percentage of the medical expenses, which is a standard feature in many health insurance plans.

D (settle on a percentage basis when they own two or more policies.) YOUR ANSWER

This option conflates the concept of coinsurance with multiple policies. Coinsurance does not pertain to the ownership of multiple policies but rather to the cost-sharing arrangement within a single insurance policy after the deductible is satisfied.

Conclusion

Coinsurance is a key feature of health insurance that ensures insured individuals contribute to their healthcare costs, typically after meeting a deductible. Among the choices, only option C accurately captures the requirement of paying a percentage of incurred expenses, emphasizing the shared financial responsibility between the insured and the insurer. The other options misinterpret or misrepresent the fundamental principles of coinsurance in health coverage.

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