What is one potential effect of an assignment of benefits in health insurance?

The assignment of benefits in health insurance refers to a policyholder's decision to transfer the right to receive payment for health care services from the insurance company directly to the healthcare provider. Choosing this option allows the provider to receive payment directly from the insurance company, rather than the policyholder receiving the funds and then paying the provider.

This method of direct payment can streamline the process for both the patient and the provider. For the patient, it eliminates the hassle of managing the paperwork and waiting for reimbursement after upfront medical expenses. This is especially beneficial in situations where patients may be unable to pay large medical bills upfront. Meanwhile, providers often prefer this arrangement as it ensures they receive payment more promptly without needing to chase down the patient for payment later.

Other options present concepts that relate to health insurance but do not accurately describe the primary effects of an assignment of benefits. For instance, while it may influence premiums indirectly over time, it does not directly lead to higher premiums. Although some administrative burdens may be lightened, the need to file claims does not disappear entirely as insurance companies still require information about the services provided. Lastly, an assignment of benefits does not inherently restrict the choice of healthcare providers; rather, it simply changes the payment process between the insurance and the provider.