What is a copayment in the context of health insurance?

A copayment, often referred to as a copay, is a fixed amount that a policyholder is required to pay out of pocket at the time they receive a specific healthcare service. This might include doctor visits, prescription medications, or emergency room services. The primary function of a copayment is to share the cost of healthcare services between the insurer and the insured, making it easier for policyholders to understand and predict their healthcare expenses.

This fixed fee can vary depending on the type of service received; for example, a primary care visit may have a lower copay than a specialist visit. By requiring a copayment, insurers can encourage responsible use of healthcare services, as insured individuals are directly contributing a portion of the cost at the time of service.