Which of the following describes co payments?

Co payments refer to a fixed amount that the insured individual is required to pay at the time of receiving a specific service or medication. This arrangement is common in various health insurance plans, where it serves to share the costs of healthcare between the insurer and the insured. Co payments are typically applied to visits to healthcare providers, prescriptions, and other types of medical services.

This system of fixed payments helps to deter unnecessary use of medical services, as the insured has a financial stake in the costs incurred. By design, co payments are meant to reduce the overall expenses that insurance companies face by encouraging patients to only seek care that is genuinely needed, as they are responsible for a specified portion of the cost upfront.

The other options describe different concepts related to health insurance. For example, a percentage of costs borne by the insurance refers to co-insurance, the initial out-of-pocket limit pertains to deductibles, and monthly fees to maintain coverage are known as premiums.