What does Coordination of Benefits allow between insurers?

Coordination of Benefits (COB) is a system used by insurance companies to determine how they will pay claims when an individual is covered by more than one health insurance plan. The primary purpose of COB is to ensure that the total payment received from all insurers does not exceed 100% of the covered healthcare expenses.

The correct answer highlights that the secondary payor adjusts its payment to ensure that the combination of benefits from both insurers does not surpass the total allowable amount for the claim. This means that if the primary insurer pays a portion of the claim, the secondary insurer will then pay the remaining amount, but only to the extent that the combined total of both insurers does not exceed the total charge for the services received. Thus, this approach helps to prevent overinsurance and ensures a fair distribution of benefits among insurers.

In contrast, the other choices do not align with the principles of coordination of benefits. Increasing claim payments or requiring equal payments from both insurers would disrupt the purpose of COB. Similarly, preventing any payment on a claim contradicts the fundamental goal of ensuring that covered individuals receive the appropriate benefits when multiple insurers are involved.