Copayment

A patient's copayment or copay is the patient's share of the cost for goods or services rendered, with the other share ("co" = with) paid by the patient's insurance company. The patient's co-payment is usually paid directly to the provider, but is instead paid indirectly through their insurance company in the case of Medicare Part D patients enrolled in the Medicare Prescription Payment Plan, which began on January 1st, 2025.
It may be defined in an <a href="/facts/Insurance_policy/xnuNEzpS">insurance policy</a> and paid by an insured person each time a <a href="/facts/Medical_service/LPS1WKbI">medical service</a> is accessed. It is technically a form of <a href="/facts/Coinsurance/J3HCHvaD">coinsurance</a>, but is defined differently in <a href="/facts/Health_insurance/sGeHMbID">health insurance</a> where a coinsurance is a percentage payment after the <a href="/facts/Deductible/LyAto48v">deductible</a> up to a certain limit. It must be paid before any policy benefit is payable by an insurance company. Copayments do not usually contribute towards any policy <a href="/facts/Out-of-pocket_expense/t49Tb1Sy">out-of-pocket</a> maximum, whereas coinsurance payments do.
Insurance companies use copayments to share <a href="/facts/Health_care_costs/LpM7ISXR">health care costs</a> to prevent <a href="/facts/Moral_hazard/HdsYcG0B">moral hazard</a>. It may be a small portion of the actual cost of the medical service but is meant to deter people from seeking medical care that may not be necessary, e.g., an infection by the <a href="/facts/Common_cold/fP9A03U9">common cold</a>. In health systems with prices below the <a href="/facts/Market_clearing/m4EYJYTm">market clearing</a> level in which waiting lists act as rationing tools, copayment can serve to reduce the welfare cost of waiting lists.
However, a copay may also discourage people from seeking necessary medical care, and higher copays may result in non-use of essential medical services and prescriptions.

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Copayment