Question

Which if a consumer experiences a loss, he or she can file a with an insurance company.statement best defines the term copayment? a) it is money a consumer receives after experiencing a loss. b) it is a payment made before a consumer can make a claim. c)it is money paid by a consumer to share the cost of a payout. d) it is a fee paid to an insurance company to purchase coverage.

Answer 1

A copayment in health insurance is a fixed fee that the insured pays when receiving a service or medication. It is a form of cost-sharing designed to mitigate moral hazard by requiring some upfront costs from the insured.

Step-by-step explanation:

In health insurance, a copayment is a fixed amount that a policyholder pays out-of-pocket for a specific service or medication at the time it is received, with the insurance covering the remaining costs. It is different from a deductible, which is the total amount one must pay before the insurance starts to pay, and coinsurance, where the policyholder pays a certain percentage of the total bill after the deductible is met.

These concepts, including copayments, are part of cost-sharing measures used by insurance companies to prevent moral hazard - the tendency for insurance to alter behavior because individuals are shielded from risk.