Final answer:
The insured person typically pays an annual cost or premium for healthcare insurance. Other cost-sharing methods in health insurance include deductibles, copayments, and coinsurance, which help mitigate moral hazard by involving the insured in the payment process.
Step-by-step explanation:
In most cases, the insured person pays an annual cost or premium for healthcare insurance. The correct answer to the question is C) Premium.
Healthcare insurance typically involves various forms of cost-sharing such as deductibles, copayments, and coinsurance. A deductible is an amount that policyholders must pay out-of-pocket before their insurance coverage begins to pay. A copayment or co-pay is a fixed fee that the policyholder pays when receiving certain healthcare services. Coinsurance represents a percentage of the costs that the insured must cover, with the insurance company paying the remaining portion.
These cost-sharing mechanisms, including deductibles, copayments, and coinsurance, are designed to reduce moral hazard by making sure that the insured individual shares in the cost of their healthcare expenses before insurance benefits are provided.