What does the term copayment mean in healthcare?

The term copayment refers to a fixed amount that a patient is required to pay for a covered healthcare service, usually at the time of the service. This upfront payment is a way for insurers to share costs with patients and often applies to services such as office visits, prescription medications, or emergency room visits.

This arrangement helps to lower costs for insurers while encouraging patients to seek necessary medical care without overwhelming them with high expenses. For example, a patient might pay a copayment of $20 for a doctor's visit, while the insurer covers the remaining charges as specified in the insurance plan.

While other options mention aspects of healthcare payments, they do not accurately reflect the specific definition of a copayment. A percentage of billed charges pertains more to coinsurance, while a total amount deducted from the insurer's payment does not relate directly to how copayments function. An overall assessment of healthcare charges is too vague and does not capture the essence of what a copayment represents in healthcare financing.