What does "cost-sharing" refer to in health insurance?

Cost-sharing in health insurance refers specifically to the mechanism by which the financial burden of healthcare costs is distributed between the insurer and the insured individual. This encompasses various forms of payment that an insured person is responsible for when receiving health care services, such as deductibles, copayments, and coinsurance.

By sharing these costs, both the insurer and the insured have a stake in managing health care expenses. This arrangement helps to ensure that insured individuals have some financial responsibility, which can encourage more thoughtful decisions about healthcare utilization. The insured is not completely shielded from costs, leading to a shared commitment to the overall healthcare expenses incurred.

In contrast, other options do not accurately describe the concept of cost-sharing. For instance, full payment of services by insurers suggests there is no financial responsibility for the insured, which is not the case in most health insurance models. Similarly, the total cost of health care services does not focus on the distribution of those costs and ignores the interaction between insurer and insured. Lastly, the amount paid in premiums pertains strictly to the cost of maintaining insurance coverage, rather than the ongoing expenses incurred when accessing healthcare services. Understanding cost-sharing is crucial for navigating financial responsibilities in health insurance.