Final answer:
The incorrect statement about a coordination of benefits provision is that it coordinates benefits under all group and individual policies. COB is designed to prevent overcompensation, limit benefits with multiple plans, and determine the primary payer. It usually does not involve individual policies unless specified.
Step-by-step explanation:
The statement about a coordination of benefits provision in group health insurance policies that is not true is: "It coordinates benefits under all available group and individual policies." Coordination of Benefits (COB) is indeed designed to prevent overcompensation for incurred losses, limit benefits when insured under more than one plan, and establish which plan pays first. However, COB typically coordinates benefits among group policies, and does not necessarily involve individual policies unless specifically designed to do so.
In terms of reducing moral hazard, COB works alongside other cost-sharing mechanisms such as deductibles, copayments, and coinsurance. These measures ensure that the policyholder bears a portion of the cost, therefore discouraging overutilization and helping to manage the financial risk for insurance companies.
Insurance companies benefit from negotiating lower rates due to their large client base, thus aiding in the reduction of costs when settling claims. These measures in place ultimately lead to a more balanced and fair distribution of healthcare costs and coverage between insurance providers, policyholders, and healthcare service providers.
Answer: C) It coordinates benefits under all available group and individual policies.