What does "co-payment" mean in health insurance?

In health insurance, "co-payment" refers to a fixed amount that an insured individual is required to pay for specific services or medications at the time of receiving care. This concept is designed to share the cost of healthcare between the insurer and the insured, making it clear what portion the insured is responsible for upfront.

For example, if a health insurance plan includes a co-payment of $25 for a doctor's visit, the insured person pays that set amount directly to the healthcare provider, regardless of the total cost of the visit. The insurer then covers the remaining expenses as stipulated by the policy.

This system helps encourage responsible use of healthcare services, as it requires the insured to contribute a portion of the cost out of pocket, while providing clarity and predictability regarding payments for medical care.