Final answer:
The statement is false; a copayment is a fixed fee paid at service delivery, while coinsurance is a percentage shared cost after meeting the deductible. Deductibles represent the initial out-of-pocket expense before insurance coverage applies.
Step-by-step explanation:
The statement that the copayment provision deals with the amount that someone will pay for a bill such as 20% coinsurance is False. A copayment, often referred to as a copay, is actually a flat fee that an insurance policyholder must pay when receiving services. For example, it could be $20 for a doctor's visit or $250 for an emergency room visit. On the other hand, coinsurance is a type of cost-sharing where the policyholder pays a certain percentage of the total cost of the services they receive. This could indeed be 20%, where the insurer would pay the remaining 80% of the incurred expenses after the deductible has been met.
Both deductibles and copayments are methods employed by insurance companies to involve the insured in sharing the cost burden, subsequently reducing moral hazard. A deductible is the amount the policyholder is required to pay out-of-pocket before the insurance company pays for any services. After this threshold is met, the insurer may cover the rest or enter into a coinsurance agreement where costs are split based on a predetermined percentage.