What is the goal of health insurance co-insurance?

The goal of health insurance co-insurance is to share the risk and costs between the insurer and the insured. This arrangement means that both parties contribute to the financial burden of healthcare services. For example, when an insured individual receives medical care, they pay a percentage of the costs, while the insurer covers the remaining amount. This system aligns the interests of both the insurer and the insured; it encourages responsible use of healthcare services since the insured must share in the costs of any care received. By sharing the percentages of medical bills, co-insurance reduces the financial risk for the insurance company and ensures that policyholders are also mindful of their healthcare expenses, promoting a balance in the utilization of services.

Other options do not accurately reflect the primary purpose of co-insurance. For instance, while incentivizing preventive care is an important aspect of health insurance strategies, it is not the fundamental aim of co-insurance specifically. Similarly, increasing total premium costs or reducing out-of-pocket expenses entirely contradict the essence of co-insurance, which highlights shared financial responsibility rather than complete cost elimination or premium inflation.