What does a copay refer to in healthcare?

A copay refers specifically to a fixed out-of-pocket cost that a patient pays at the time of receiving a prescription or other healthcare services, such as doctor visits. This fee is typically set by the patient’s health insurance plan and varies based on the type of service or medication being provided. For example, a patient might have a copay of $10 for a standard prescription but may pay a higher copay for specialty medications.

This concept is integral to how health insurance plans manage costs for both the providers and the patients. By requiring patients to pay a copay, insurance companies aim to share the financial responsibility and encourage patients to use healthcare services judiciously. The other options highlight aspects of healthcare finance but do not accurately describe a copay; they either refer to total expenditures, annual limits, or payments made by healthcare providers rather than the direct financial responsibility of the patient at point of service.