Which of the following best describes coinsurance?

Coinsurance is best described as the portion of costs shared between the insurance company and the insured. This means that after the insured has met their deductible, both the insurance company and the insured pay a certain percentage of the total costs for covered services. For example, if a plan has 80/20 coinsurance, the insurance company would pay 80% of the covered medical expenses, while the insured would be responsible for the remaining 20%.

This concept contrasts with other terms related to health insurance. A fixed amount paid for each service received refers to a copayment, not coinsurance, while the total amount paid out-of-pocket by the insured in a year is known as the out-of-pocket maximum. The maximum charge allowed for a service under a policy refers to the allowable amount, which is different from the concept of coinsurance. Hence, the option correctly articulating coinsurance is the one describing the sharing of costs.