What does copayment mean in health insurance?

Copayment refers to a fixed dollar amount that an insured individual is required to pay for a specific covered service at the time of receiving that service. This is a common feature in many health insurance plans, where the insured pays a predetermined copayment for services like doctor visits or prescription medications, while the insurance company covers the remainder of the cost.

This structure helps to share the costs of medical care between the insurer and the insured. By having a fixed copayment, insured individuals can better anticipate their out-of-pocket expenses, as they know the amount they will need to pay upfront when they seek care. This can encourage them to utilize necessary health services without fearing unpredictable costs.

In contrast, the other choices describe different aspects of health insurance that are not representative of a copayment. The percentage of costs paid after meeting a deductible describes a coinsurance arrangement, while the maximum payout for a service relates to a policy's coverage limit, and the total paid over the policy term doesn't fit the definition of copayment either.