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The purpose of Coordination of Benefits (COB) in the context of health insurance is to ensure that when a person is covered by multiple insurance plans, the payment responsibilities are properly coordinated among those plans. COB prevents issues like overpayment or underpayment for medical services by establishing a protocol for determining which insurance plan is the primary payer and which is the secondary payer.

In a situation where more than one insurance policy covers the same medical expenses, COB helps streamline the process, ensuring that patients receive their full entitled benefits without confusion. This coordination is crucial for providers as well, as it facilitates accurate billing and payment processes.

The other options, while identifiable terms, do not relate to the established function of COB in health insurance. For instance, "Coverage of oxygen benefits" does not apply generally to the broader context of insurance coordination. "Cost of basic operations" may refer to expenses associated with running a healthcare operation, not benefits coordination. "Creation of balanced options" lacks specificity and relevance to how insurance policies interact with each other regarding benefit payments. Therefore, A stands as the clear and accurate representation of the concept of COB within health insurance.