What is a co-payment?

A co-payment is defined as a fixed amount that an insured individual is required to pay for a specific service or treatment at the time of receiving care, independent of the total cost of that service. This structure allows for predictable out-of-pocket expenses for patients, making it easier for them to budget for healthcare costs.

For example, if a health insurance plan requires a $20 co-payment for a doctor’s visit, the insured would pay $20 at the time of the appointment, while the insurance company covers the remaining cost, irrespective of whether the total bill was higher or lower.

The other options do not accurately describe a co-payment: the monthly premium is a standard payment to maintain active insurance coverage, a deductible refers to the amount that must be paid out-of-pocket before insurance coverage kicks in, and a percentage of the total cost describes coinsurance, which is a different type of cost-sharing arrangement.