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

Cost-sharing in health insurance refers to the out-of-pocket costs that consumers pay when they receive healthcare services. This includes various expenses that must be covered by the insured individual rather than the insurer. Typical forms of cost-sharing include deductibles, copayments, and coinsurance.

When a health plan has cost-sharing requirements, it means that while the insurance provider covers a significant portion of healthcare costs, the insured individual also needs to contribute a part of it through these out-of-pocket payments. This mechanism is designed to encourage responsible use of healthcare services and help reduce overall costs for insurance providers.

Understanding cost-sharing is crucial for individuals as it impacts their overall healthcare expenses and can influence their choice of plan based on affordability and healthcare needs. The other options do not capture the meaning of cost-sharing; they instead refer to unrelated aspects of health insurance, such as premium costs, provider selection, and claim coverage percentages.