What fundamental function does "coinsurance" serve in health insurance?

Coinsurance plays a crucial role in health insurance by ensuring that the insured party shares a portion of the costs associated with their healthcare. It typically refers to the percentage of the medical expenses that the insured is required to pay after reaching any applicable deductible. This arrangement means that once an individual has met their deductible, they will still be responsible for a certain percentage of covered medical expenses while the insurer pays the remaining percentage.

This shared responsibility encourages individuals to be more conscious of their healthcare consumption since they are financially invested in their medical costs. It can discourage over-utilization of healthcare services, which could lead to higher overall costs. By participating in these costs, insured individuals are actively involved in managing their healthcare expenses, aligning their interests with those of the insurance provider, which ultimately helps control healthcare spending.

The other options do not accurately capture the essence of coinsurance: it does not primarily aim to establish a cap on costs or provide full coverage under any circumstances, nor is its main purpose solely to reduce costs for the insurer. Rather, the focus is on risk-sharing between the insurer and the insured, making option B the most accurate representation of the fundamental function of coinsurance in health insurance.