Co-payments and deductibles provide a means of reducing moral hazard problems because they allow each party in the transaction to share in the costs.

Question

Quizplus · Accepted Answer

Co-payments and deductibles require the consumer to pay a portion of the cost of the service, which reduces the incentive to overuse or misuse healthcare services, thus reducing moral hazard problems. Sharing costs between the consumer and the insurer also helps to align incentives and promote efficiency in healthcare transactions.

Co-Payments and Deductibles Provide a Means of Reducing Moral Hazard