Final answer:
Coinsurance is where policyholders pay a percentage of their medical bills, while a copayment is a fixed amount they pay for specific services. These cost-sharing mechanisms, which also include deductibles, are integral to insurance policies and are designed to reduce overutilization by making sure patients share in the cost of their healthcare.
Step-by-step explanation:
The student's question pertains to the types of payments that individuals make when they have health insurance coverage. Specifically, coinsurance refers to the percentage of medical bill costs that insured individuals are required to pay, while a copayment, or co-pay, is a fixed amount they pay for healthcare services, irrespective of the total bill. In terms of health maintenance organizations (HMOs), these plans usually charge a fixed fee per enrollee and provide services under that fixed fee structure. On the other hand, a fee-for-service model compensates healthcare providers based on the individual services they render.
Deductibles, copayments, and coinsurance are important elements of many health insurance policies designed to share costs between the insurer and the insured, and to reduce moral hazard by ensuring that policyholders have a financial stake in the cost of their care. Ultimately, these cost-sharing mechanisms can lead to reduced consumption of healthcare services, as individuals are liable for a portion of the costs.