Answer:
Firstly, deductibles serve as a cost-sharing mechanism, requiring policyholders to pay a predetermined amount out of pocket before the insurance coverage begins. This helps prevent frivolous claims and encourages responsible healthcare utilization.
Secondly, coinsurance requires policyholders to pay a percentage of the medical costs even after the deductible is met. This feature aligns the interests of the insured with those of the insurer. It promotes financial responsibility and discourages unnecessary or overly expensive treatments.
These features also help control overall healthcare costs. By sharing a portion of the expenses with policyholders, insurers can offer more affordable premiums. Additionally, the cost-sharing mechanisms incentivize individuals to seek cost-effective healthcare services, contributing to the sustainability of the insurance system.
In essence, deductibles and coinsurance features strike a balance between providing financial protection and encouraging responsible healthcare consumption in the context of rising medical costs.
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