Understanding Co-Payments in Health Insurance

What is a Co-Payment and How Does it Work in Health Insurance?

Co-payment, also known as a co-pay, is a fixed amount that an individual must pay out-of-pocket for a covered healthcare service, usually at the time of service. This amount is in addition to any amounts covered by insurance. For example, an individual may have a health insurance policy with a $20 co-pay for doctor visits. This means that the individual is responsible for paying $20 towards the cost of the doctor visit each time they see a doctor, regardless of the actual cost of the visit. The insurance company will then cover the remaining portion of the cost. Co-payments are a common way for insurance companies to share the cost of healthcare with policyholders, as they help to keep premium costs lower.