In insurance terminology, what is a copayment?

A copayment, often referred to as a copay, is a predetermined amount that an insured individual is required to pay at the time of receiving a medical service or prescription. This amount is set by the insurance policy and can vary based on the type of service; for example, a visit to a primary care physician might have a lower copayment than seeing a specialist or going to the emergency room. The purpose of a copayment is to share the cost of healthcare between the insured and the insurer, thereby encouraging responsible use of medical services.

In context, while the total amount insured refers to the overall financial aspects of the insurance policy, and clauses detailing specific exclusions help define what is not covered by the insurance, these concepts do not relate to the concept of copayments. Similarly, the maximum amount an insurer will cover for a claim pertains to limits on financial coverage rather than the cost-sharing arrangement involved with copayments.