What is meant by coordination of benefits (COB) in health insurance?

Coordination of benefits (COB) in health insurance refers to a process where multiple insurance policies work together to ensure that the insured individuals receive appropriate benefits without overpayment. Specifically, when an individual is covered by more than one health insurance plan, these plans coordinate how payments are made for claims to prevent duplication and establish the priority of coverage. This typically involves determining which plan is primary (pays first) and which is secondary (pays after the primary).

The correct option highlights the role of two insurance companies collaborating to manage these payments efficiently. By coordinating benefits, the insured can avoid situations where both plans might pay for the same expense, which could lead to fraud or excessive reimbursement. This process is essential in managing healthcare costs and ensuring that patients receive the care they need without being overwhelmed by the complexities of multiple insurance coverage.

In contrast, other options do not accurately capture the essence and purpose of COB. The notion that multiple health policies simply work together for patient care overlooks the financial and administrative side of managing benefits. Updating patient information across insurance plans describes a different administrative function, while assessing overlapping coverage doesn’t encompass the full coordination of payments between insurers. Therefore, the primary focus of COB is on the collaboration between the insurance companies to manage benefits effectively