What is a copayment?

A copayment is defined as a fixed amount that an insured individual is required to pay for specific medical services at the time care is received. This arrangement is common in health insurance plans, where, for instance, a patient might pay a predetermined amount for a doctor's visit or prescription medication. This fixed fee allows for predictable out-of-pocket costs for patients and is distinct from other forms of cost-sharing like coinsurance, where the insured pays a percentage of the costs.

In contrast, the other choices refer to different insurance concepts. The first option describes coinsurance, where the insured pays a percentage of medical expenses rather than a fixed fee. The second option refers to the total premium cost, which is what a policyholder pays annually to maintain their insurance coverage. The final option describes a deductible, which is the total amount the insured must pay out-of-pocket before the insurance coverage kicks in for services rendered. Understanding these distinctions is crucial for navigating health insurance effectively.