Which statement about coinsurance is CORRECT?

The correct statement regarding coinsurance is that it helps control overutilization of benefits. Coinsurance is a cost-sharing mechanism in health insurance where the policyholder pays a certain percentage of the costs of covered services after any deductible has been met. This arrangement encourages insured individuals to be more mindful of their healthcare spending, as they are financially responsible for a portion of the costs. As they directly share in the expenses, it reduces the likelihood of seeking unnecessary care, thereby promoting more responsible utilization of benefits.

When individuals have a stake in their healthcare costs, they may opt for less expensive treatments or refrain from using services unless truly necessary. This cost-sharing strategy is designed to balance access to care while preventing excessive or unnecessary use of healthcare services—which is a primary goal of coinsurance in the insurance framework.

The other statements do not accurately reflect the nature of coinsurance. While coinsurance does not apply to the deductible in the sense of adding additional costs during the deductible phase, and typically, policies with coinsurance may not always be more expensive than those without it, coinsurance ratios are set at the inception of the policy and do not change post-issuance. Thus, the focus on how coinsurance effectively mechanisms helps control overutilization is what makes this statement