What does "co-payment" (copay) refer to in health insurance?

Co-payment, often referred to as a copay, is a specific term in health insurance that describes a fixed amount the insured is required to pay for a covered healthcare service at the time it is rendered. This practice allows the insured to know exactly what they will need to pay upfront when receiving care, making healthcare costs more predictable. For instance, a health plan might require a $20 copay for a routine doctor's visit, meaning that at the time of the visit, the insured would pay $20, and the insurance would cover the remaining cost of the service.

This mechanism is common in health insurance plans as it helps to share the cost of healthcare between the insurer and the insured, encouraging patients to seek necessary care while also preventing excessive use of medical services. In contrast, other options describe different aspects of health insurance costs. For example, the total amount the insurer covers refers to the insurance's responsibility in handling high costs, while the percentage of the total cost illustrates how co-insurance works, which is different from copays. Additionally, the total annual amount an insured must pay before coverage begins is known as a deductible, not a copay. Each of these terms plays a distinct role in the structure of health insurance, emphasizing the importance of understanding