What is the purpose of a co-payment in insurance?

A co-payment serves a specific role in insurance policies, particularly in health insurance. It is a fixed amount that the insured person pays for specific services at the time of receiving care, which is separate from the overall cost of treatment. This structure helps to manage costs for both the insurer and the insured.

The primary purpose of a co-payment is to ensure that the insured has a predetermined financial contribution towards their medical expenses, making it easier to budget for healthcare costs. It encourages preventive care by allowing individuals to seek necessary medical services without facing the full burden of the expenses immediately. By having a set fee, co-payments simplify the payment process and help control the insured's spending by ensuring they contribute to the cost of their healthcare.

In contrast, options related to covering high deductible costs, reducing claims, or enhancing coverage limits address different aspects of insurance and risk management that do not directly relate to the co-payment structure. Co-payments are meant to facilitate the user's access to care while sharing costs rather than changing claim processes or terms of coverage.