What is the primary purpose of coinsurance provisions?

The primary purpose of coinsurance provisions is indeed to help prevent overutilization of the policy. Coinsurance is designed to share the costs of covered services between the insured and the insurer, typically expressed as a percentage that the insured must pay after meeting any deductible. This financial responsibility encourages policyholders to be more judicious in seeking healthcare services.

When patients are required to pay a portion of their medical bills, they are more likely to consider whether the care is necessary, helping to reduce unnecessary medical treatments and expenses. This mechanism not only assists in controlling overall healthcare costs but also promotes responsible use of health services, aligning patient behavior with cost management objectives of insurance providers.