Final answer:
The deductible for Medicare Part A must be met before coverage kicks in. This deductible is part of the cost-sharing measures like copayments, both of which contribute to reducing moral hazard by creating a financial responsibility for the insured party.
Step-by-step explanation:
In the context of Medicare Part A, patients are required to meet a deductible before coverage begins for hospitalization costs. Medicare Part A is designed to cover hospital stays and related services, and it is partially funded by payroll deductions from individuals and their employers.
Before Medicare payments are authorized, an initial deductible needs to be paid by the individual. After the deductible is met, there may still be copayments required for extended hospital services. This cost-sharing mechanism, which includes deductibles and copayments, aims to reduce moral hazard by ensuring that beneficiaries have a financial stake in their healthcare consumption. Reducing moral hazard is believed to lead to more cost-conscious decisions by health insurance policyholders.