California Life-Only & Accident and Health AgentAccident and Health InsuranceEasy
A client is covered by a health insurance policy and suffers an unexpected injury. The policy requires her to pay a set amount for each doctor's visit, regardless of the total cost of the visit, before the insurance company pays its share. What is this set amount called?
- ACopayment
- BDeductible
- CPremium
- DCoinsurance
Show answer & explanationAnswer & explanation
Correct answer: A. Copayment
A copayment (or copay) is a fixed amount an insured person pays for a covered service, such as a doctor's visit or prescription, at the time of service. It's a common form of cost-sharing.
Why the other options are wrong
- B. A deductible is the amount an insured must pay out-of-pocket before the insurance company begins to pay for covered services.
- C. A premium is the regular payment made to the insurance company to keep the policy in force.
- D. Coinsurance is a percentage of the cost of a covered health service that the insured pays after they've met their deductible.
Copayment (Copay)
A fixed amount an insured person pays for a covered health service, such as a doctor's visit or prescription, at the time the service is received, after which the insurer pays the remaining balance.
- Fixed dollar amount.
- Paid at the time of service.
- Applies to specific services like doctor visits or prescriptions.
Memory trick: Cost-sharing: you PAY a fixed amount at the COunter.