Copayment
Copayment
Copayment (pronounced: co-pay-ment), also known as a copay, is a fixed amount a healthcare beneficiary is required to pay for receiving specific medical services or products. The term is primarily used in the context of health insurance policies.
Etymology
The term 'copayment' is derived from the prefix 'co-', meaning 'together', and 'payment', referring to the act of giving money in exchange for goods or services. Thus, 'copayment' signifies a payment made together with the insurance company.
Definition
A copayment is a predetermined rate paid by an individual each time a medical service is accessed. It is an out-of-pocket cost that is typically required at the time of the service. Copayments are used by health insurance companies to share healthcare costs to prevent moral hazard.
Related Terms
- Deductible: The amount that the insured must pay out-of-pocket before the health insurer pays its share.
- Coinsurance: A form of cost sharing where costs are split on a percentage basis between the insurance company and the insured individual after the deductible has been paid.
- Out-of-pocket maximum: The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance, your health plan pays 100% of the costs of covered benefits.
- Premium: The amount that must be paid for your health insurance or plan.
External links
- Medical encyclopedia article on Copayment
- Wikipedia's article - Copayment
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