What is the primary purpose of the coordination of benefits provision?

The primary purpose of the coordination of benefits provision is to determine the order of payment between insurers when an individual is covered by more than one health insurance policy. This provision is crucial in ensuring that claims are paid correctly and that the combined benefits from multiple policies do not exceed the total amount of the claim. By establishing which policy pays first and the extent to which each policy contributes, coordination of benefits avoids overinsurance, where the total reimbursement would exceed the actual costs incurred. This system helps to maintain fairness among insurers and ensures that both the insured individual and the insurers are treated equitably during the claims process.

While simplification of claims processing, maximum coverage, and fraud elimination are important aspects of health insurance, they are not the main focus of the coordination of benefits provision. The essence of this provision lies in its ability to clarify the responsibilities of each insurer in the event of overlapping coverage.