What is the purpose of COB in healthcare coverage?

The purpose of Coordination of Benefits (COB) in healthcare coverage is fundamentally to prevent multiple insurance plans from overlapping in their coverage. When an individual has more than one health insurance plan, COB regulations determine which insurer pays first, thereby avoiding duplicate payouts for the same healthcare service. This is particularly important in ensuring that payments are properly aligned with the coverage policies of each insurance plan. The primary goal is to establish a systematic approach to managing benefits among insurers, which helps to streamline claims processing and reduces the potential for confusion about coverage.

By preventing overlaps, COB also helps to limit the financial burden on insurers and encourages them to provide benefits more efficiently. This coordination ensures that the combined payments from multiple insurance plans do not exceed the actual cost of care, thus maintaining the integrity of the insurance system as a whole.