In the context of health insurance, what is a co-payment?

A co-payment is defined as a fixed amount that a policyholder is required to pay for a specific healthcare service at the time the service is provided. This arrangement is typically outlined in a health insurance plan and is meant to share the cost of services between the insurer and the insured. The co-payment amount can vary depending on the type of service, such as a doctor's visit, specialist consultation, or prescription medication, and is often established at the time the insurance policy is created.

This feature of health insurance helps manage costs and encourages patients to seek necessary medical care without facing overwhelming financial burdens. Other options do not accurately describe a co-payment: the total amount paid for premiums refers to regular payments to maintain coverage; the out-of-pocket limit is the maximum expense a person will incur in a year before the insurance covers all costs; and a percentage of the total medical bill relates to coinsurance, which involves sharing costs based on a percentage rather than a fixed fee.