What is a co-payment in the context of health insurance?

In the context of health insurance, a co-payment, often referred to simply as a co-pay, is defined as a fixed amount that an insured individual pays for specific healthcare services at the time of receiving those services. This can include visits to a doctor, prescription medication, or certain types of medical procedures. Co-payments are predetermined amounts outlined in an insurance policy, and they usually vary depending on the type of care received.

For instance, an insurance plan might specify a $20 co-payment for visiting a specialist and a $10 co-payment for a primary care visit. Importantly, this payment is due at the time of service, helping to share the cost of healthcare between the insurance provider and the insured.

Other options might confuse co-payments with other cost-sharing arrangements in health insurance. For example, a percentage of costs shared after the deductible is met refers to co-insurance, which involves a varying percentage of the total costs rather than a set fee. Similarly, a yearly limit on out-of-pocket expenses pertains to caps set by insurance plans on how much an individual would need to pay in total for covered services within a policy year, not specific to per-visit payments. Lastly, the total annual insurance premium encompasses the total cost paid for