Final answer:
The statement is true as it describes a tail coverage option for health care practitioners, which extends malpractice coverage after a claims-made policy is discontinued provided the incidents occurred during the active policy period.
Step-by-step explanation:
The scenario described in the question refers to a type of insurance policy enhancement known as a tail coverage. Tail coverage is an insurance coverage option that can be added to a claims-made policy. It extends coverage for claims reported after such a policy has been canceled or discontinued, as long as the alleged incident(s) occurred while the claims-made policy was active. This coverage is critical for health care practitioners who want to protect themselves against malpractice claims that may arise after they change policies or retire. So, the statement given is true.
In the context of health financing systems such as fee-for-service and health maintenance organizations (HMOs), it is important for healthcare providers to understand their insurance options thoroughly. Fee-for-service systems involve payment based on services rendered, while HMOs operate on a capitation basis, where providers are paid a set fee per patient. In both systems, the risk of adverse selection can significantly impact the operation and viability of insurance products, including malpractice insurance.