What does the term "co-payment" in health insurance plans refer to?

The term "co-payment" in health insurance plans refers to a fixed amount paid for a specific service. This is a cost-sharing mechanism that requires the insured individual to pay a predetermined amount for certain medical services or prescriptions at the time of care. For example, a health plan might require a $20 co-payment for each visit to a primary care doctor.

Co-payments are designed to make healthcare costs predictable for consumers and encourage them to seek necessary medical care without the burden of paying the full cost out of pocket at the point of service. This structure allows both insurers and consumers to share the cost burden, ensuring that individuals contribute towards their healthcare while maintaining access to services.

The other options describe different aspects of health insurance. The total cost of a procedure encompasses all charges for a particular service, including both insurance payments and out-of-pocket expenses, rather than a fixed co-payment. The annual limit on out-of-pocket expenses refers to the maximum amount an insured person would pay in a year before the insurance covers 100% of costs, which is not defined by a co-payment structure. Lastly, the total premium paid monthly is the regular payment to maintain the insurance policy and is separate from co-payments for specific services.