Paying Providers & Paying Hospitals
Cost sharing is quite literally the insured individual sharing the cost of care with the insurance company. The employee has risk. In other words, if he/she uses care there will be a financial consequence. In theory this will make the inured individuals more likely to make health care decisions that take cost into account. In other words if the person has to pay a part of the care then he or she will chose less expensive care, avoid unnecessary care, and seek care only when needed. The economic theory of moral hazard maintains that insurance changes behavior. If a person is insulated against the cost then he or she will use more services.
Premiums are not the same type as cost sharing because they do not vary with utilization, but your book does categorize them as such. The three types of cost sharing are co-pays, co-insurance and deductibles. The arrangements vary by plan. See the infographic below for more information.
Humana Video on Deductibles and Copayments
For a synthesis of managed care and cost sharing check out The Anatomy of Health Insurance Infographic.