Which of the following is true about coinsurance in health insurance?

Coinsurance is a fundamental concept in health insurance that pertains to the sharing of costs between the insurer and the insured after a deductible has been met. The insured pays a specified percentage of the covered medical costs, while the insurance company covers the remaining percentage.

The assertion that coinsurance can result in higher out-of-pocket costs for insureds is accurate. This is because the insured is responsible for a portion of medical expenses. Depending on the percentage specified in the coinsurance clause, this arrangement can lead to significant costs for the insured, especially in cases of high medical bills or chronic health conditions that require ongoing treatment.

For instance, if a policy has a coinsurance provision of 20%, it means that after the deductible is satisfied, the insured will have to pay 20% of their medical bills. In scenarios where substantial medical care is needed, the cumulative amount that the insured pays can become quite high, thereby increasing overall out-of-pocket expenses.

The other options don't accurately reflect the nature of coinsurance. While it might influence premiums, saying it consistently lowers premium costs is not guaranteed. Coinsurance is not mandated by state law; rather, it is a feature that can be included in various plans at the insurer's discretion. Additionally, coinsurance commonly