Coinsurance
Coinsurance is the percentage of the allowed amount a patient owes after meeting their deductible — commonly 20% on commercial plans and Medicare Part B. On a $92.40 allowed amount, 20% coinsurance is $18.48. It appears on remittances as PR-2 and always calculates from allowed, never billed, charges.
- Type
- Percentage of the allowed amount
- Typical rate
- 20% (Medicare Part B; many commercial plans)
- ERA code
- PR-2 (patient responsibility: coinsurance)
- Applies
- After the deductible is met
How does coinsurance work?
Coinsurance is a percentage split of the allowed amount between plan and patient — 80/20 is the classic design — that kicks in after the deductible is satisfied. Unlike a copay, it scales with the cost of the service: 20% of an office visit is pocket change, 20% of an MRI is real money, and 20% of a surgery is a financing conversation. On the ERA it posts as PR-2.
What does the math look like on a real claim?
In-network visit, deductible already met, 20% coinsurance:
- Billed: $180.00 — irrelevant to the split
- Allowed: $92.40
- Patient coinsurance: 0.20 × 92.40 = $18.48 (PR-2)
- Plan pays: 0.80 × 92.40 = $73.92
- Contractual adjustment: 180.00 − 92.40 = $87.60 (CO-45)
Now the same claim with $60 of deductible remaining: the first $60 of the allowed amount goes to deductible (PR-1), coinsurance applies to the remaining 92.40 − 60 = 32.40, so PR-2 is 0.20 × 32.40 = $6.48, and the plan pays $25.92. Patient total: $66.48. Deductible and coinsurance interact on every claim early in the year — this is why January estimates go wrong.
How is coinsurance different from a copay and a deductible?
Order of operations: the deductible is paid first, in full, by the patient. Then coinsurance splits costs by percentage. A copay is a flat fee that usually sits outside this sequence entirely. Rule of thumb for the front desk: copay = fixed and known before the visit; coinsurance and deductible = variable and only exact after adjudication. That distinction decides what you can confidently collect at check-in versus what you estimate.
How do you estimate and collect coinsurance?
- Pull the contracted allowed amount for the scheduled CPTs from your fee schedules — never estimate off billed charges.
- Check remaining deductible on the eligibility response and apply it before the percentage.
- Collect the estimate or a deposit at check-in, clearly labeled an estimate, with card-on-file for the true-up.
- Reconcile against the ERA — PR-1 plus PR-2 is the real patient responsibility; refund or bill the difference promptly. The ERA vs EOB entry covers where to read these amounts.
Frequently asked questions
Always the allowed amount for in-network care. If you bill $180 and the payer allows $92.40, a 20% coinsurance is $18.48 — 20% of 92.40, not 20% of 180. Practices that estimate coinsurance from billed charges over-collect and end up issuing refunds.
After the annual Part B deductible, Medicare pays 80% of the allowed amount and the beneficiary owes 20% coinsurance with no annual out-of-pocket cap in traditional Medicare. That uncapped 20% is precisely what Medigap supplement plans exist to cover, and why so many Medicare claims cross over automatically to a supplement.
On commercial plans, yes — once the patient hits the annual out-of-pocket maximum, the plan pays 100% of covered in-network services for the rest of the plan year. Traditional Medicare Part B has no out-of-pocket maximum; Medicare Advantage plans must have one.
Sources & further reading
Reviewed by the ImmediCare Solutions RCM team
Certified billers and coders handling claims across 50+ specialties nationwide. This entry is reviewed against current payer policy and CMS rules. Last review: Jul 5, 2026.
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