What is a copayment in health insurance?

A copayment in health insurance is a fixed amount that an insured individual is required to pay for specific health services at the time of receiving the service. This payment structure is designed to share costs between the insurer and the insured, making healthcare more accessible. For example, when visiting a doctor, an individual might have a copayment of $20, which they pay at the time of the visit, while the insurance covers the remaining costs.

Understanding this concept is crucial for policyholders as it helps them anticipate out-of-pocket expenses for routine care and services, allowing for better financial planning regarding their healthcare costs. Copayments are often used for various services, including doctor's visits, prescription medications, and specialist consultations, making them an integral part of many health insurance plans.