Final answer:
Deductibles, copayments, and coinsurance are forms of cost sharing in health insurance that reduce moral hazard by requiring the insured party to bear some of the costs before collecting insurance benefits.
Step-by-step explanation:
Deductibles, copayments, and coinsurance are forms of cost sharing in health insurance. A deductible is the maximum amount that the policyholder must pay out-of-pocket before the insurance company starts paying.
Copayments are fixed fees that the policyholder must pay for each service or medication. Coinsurance is a percentage of the costs that the policyholder must pay.
These forms of cost sharing reduce moral hazard by requiring the insured party to bear some of the costs before collecting insurance benefits. Moral hazard refers to the tendency of individuals to use more healthcare services when they have complete insurance coverage without paying anything out of pocket.
By introducing deductibles, copayments, and coinsurance, individuals are incentivized to be more mindful of their healthcare utilization and make more informed choices.