What is the primary benefit of a coinsurance clause?

The primary benefit of a coinsurance clause is that it places some financial responsibility on the insured for the costs of services. Coinsurance is a provision in health insurance policies that requires the insured to pay a specified percentage of the costs of their healthcare services after they have met their deductible. This structure encourages insured individuals to be more mindful of their healthcare expenses, as they share in the cost, which can help control unnecessary utilization of services.

For instance, if a policy has an 80/20 coinsurance clause, the insurer covers 80% of the costs while the insured pays 20%. This arrangement can help keep premiums lower because it encourages responsible use of medical services. Rather than having the insurer cover all expenses, the coinsurance clause incentivizes insured individuals to consider the necessity of the services they are receiving, ultimately promoting cost-sharing in a way that can maintain the sustainability of the insurance model.

Other answer choices do not reflect the primary function of a coinsurance clause. It does not ensure that all costs are covered, as insured parties still bear a portion of the costs. It does not eliminate out-of-pocket expenses, as members will always have some cost due to the coinsurance arrangement. Moreover, it does not guarantee the lowest premium rates, as