What is a copayment?

A copayment is defined as a flat amount that a patient is required to pay at the time of receiving a service, such as a doctor’s visit or prescription medication. This payment model is commonly found in health insurance plans, where certain services have predetermined copay amounts. For example, an insurance plan may state that a visit to a primary care physician has a $20 copayment—this means the patient pays $20 for each visit, while the insurance covers the rest of the cost.

This structure helps share healthcare costs between the insurer and the patient while also managing healthcare utilization. It offers simplicity and predictability for patients who know upfront what part of their medical costs they will be responsible for whenever they seek care. The appeal of copayments lies in their clarity; patients can budget for medical expenses more easily compared to plans with percentage-based cost-sharing or high deductibles.