What Is a Health Insurance Copayment?

A health insurance copayment or copay is a fixed, predetermined amount that a person with health insurance pays out-of-pocket for covered services. Many health insurance plans have copays for things like visits to a doctor's office or prescription drugs. They typically come into play after the policyholder has met an annual deductible.

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Health Insurance Deductible

The amount you must pay out of pocket before your insurance coverage begins to pay for medical expenses.

Copays are a flat fixed fee a policyholder pays for a covered service. For example, if a policy has a $25 copay for a doctor's visit, that's all the policyholders would pay for that service, no matter the total visit cost. That gives policyholders clarity into the out-of-pocket costs they pay for a service.

On the other hand, coinsurance is a percentage of the total cost of a covered medical service. The out-of-pocket cost will vary by service and provider. For example, if a policyholder has a 20% coinsurance, they'd pay 20% of a covered medical expense. So, if they had to visit a specialist that cost $300, they'd pay $60 for that visit.

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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

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