What does the term "cost-sharing" mean?

The term "cost-sharing" refers specifically to the way in which healthcare expenses are divided between the insurer and the insured. It encompasses mechanisms such as deductibles, copayments, and coinsurance. For instance, when you have a deductible, you might pay a certain amount out-of-pocket before the insurance begins to cover costs. After meeting the deductible, you might pay a copay for each doctor visit or a percentage of costs as coinsurance. This structure ensures that both the insurer and the insured contribute to the overall cost of healthcare services, promoting shared financial responsibility and helping to keep premiums more affordable. Understanding this concept is crucial for navigating health insurance options effectively, as it directly impacts how much a policyholder will pay when receiving care.