What is a copayment?

• A. A percentage of medical costs paid after deductible.
• B. A fixed dollar amount paid by the insured for a service at the time of service.
• C. The total annual amount paid by the insurer for services.
• D. The maximum out-of-pocket limit.

Answer: (B)

A copayment is a fixed dollar amount you pay for a covered service at the time you receive it. This amount is set by your insurance plan and is paid regardless of the total charge for the service, making costs predictable for that visit or service. It differs from coinsurance, which is a percentage of the cost you owe after any deductible has been met. It also isn’t the deductible (money you must pay before the plan pays) or the out-of-pocket maximum (the cap on your total spending for covered services). Copayments help control expenses by providing a consistent upfront cost for common services, such as a routine doctor visit or prescription.