What method is used by insurance companies to help prevent risky behavior among their clients?

Cost-sharing is a method used by insurance companies that encourages clients to be more mindful about their behavior and use of services. By requiring individuals to share in the costs of their insurance (through copayments, coinsurance, or other mechanisms), clients are less likely to engage in risky behavior or overuse services, as they have a direct financial stake in the costs incurred. This approach not only helps reduce the overall expenses for the insurance company but also promotes more responsible behavior among clients, as they are more likely to think before making a claim or seeking unnecessary treatments or services.

In contrast, premiums are the amounts paid for insurance coverage, but they do not inherently influence behavior. Deductibles refer to the amount clients must pay out-of-pocket before insurance kicks in, which does encourage some degree of careful spending, but not as directly as cost-sharing. Exclusions outline specific situations or conditions not covered in a policy, and while they inform clients of what is not covered, they do not actively discourage risky behavior.