In health insurance, what do copays represent?

Copays represent fixed fees for specific services within a health insurance plan. This means that when a policyholder visits a doctor or receives specific medical services, they are required to pay a predetermined amount. For instance, if the plan defines a copay of $20 for a doctor's visit, the insured pays that amount at the time of service, regardless of the total bill for the visit.

This system helps to share the cost of healthcare between the insurer and the insured, providing a predictable fee for services rendered. Copays are often seen for a range of services, including doctor's visits, specialist consultations, and prescription medications. They are distinct from other cost-sharing mechanisms like premiums, which are paid monthly to maintain the insurance policy, or coinsurance, which involves paying a percentage of the total cost after certain thresholds, like a deductible, are met.