What is the purpose of including deductible and coinsurance provisions in group medical insurance policies?

Expert Solution

Answer:-

The purpose of including deductibles and coinsurance provisions in group medical insurance policies is to moral hazard involved when some individuals take advantage of the benefits of group medical insurance. For purposes of cost-sharing, the deductibles and coinsurance policies helps in minimizing costs and ensuring that individuals do not go for services unnecessarily because they'll have to share part of the cost.

Explanation:-

Moral hazard is one of the risks in insurance whereby in a pool there are some individuals that may benefit from contributions made by others without them being of great contribution to others. To avoid this risk, the deductibles and coinsurance ensures that individuals do not go for medical health care services unnecessarily because all the costs will be covered. Knowing that they'll pay part of the cost makes individuals more responsible. This helps in minimizing costs which in turn will result in quality of care because the insurance company isn't overburdened it'll achieve its objective.

keosha answered 2 years ago

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