In the United States, copayment or copay is a payment defined in the insurance policy and paid by the insured person each time a medical service is accessed. It is technically a form of coinsurance, but is defined differently in health insurance where a coinsurance is a percentage payment after the deductible 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 out-of-pocket maxima whereas coinsurance payments do.

Insurance companies use copayments to share health care costs to prevent moral hazard. Though the copay is often a small portion of the actual cost of the medical service, it is meant to prevent people from seeking medical care that may not be necessary (e.g.: an infection by the common cold). The underlying philosophy is that with no copay, people will consume much more care than they otherwise would if they were paying for all or some of it.

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, thus rendering someone who is "insured" effectively "uninsured" because they are unable to pay higher copays. If the insured cannot afford the copay, they effectively have no insurance (high copays can cause a false sense of security). Thus there is a balance to be achieved: a high enough copay to deter unneeded expenses but low enough to not render the insurance useless.

Read more about Copayment:  Prescription Drugs, Observed Effects

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Copayment - Observed Effects
... Medication copayments have also been associated with reduced use of necessary and appropriate medications for chronic conditions such as chronic heart failure, chronic obstructive ... In a 2007 meta-analysis, RAND researchers concluded that higher copayments were associated with lower rates of drug treatment, worse adherence among existing users, and more frequent discontinuation of therapy ...
Healthcare In Japan - Cost
... Once a patient's monthly copayment reaches a cap, no further copayment is required ... The threshold for the monthly copayment amount is tiered into three levels according to income and age ...
FSA Debit Card - IRS Requirements
... or HRA provider must obtain from the employee's health plan the standard copayment amounts for that plan ... If the charge is exactly equal to between one and five of those copayment amounts, it may be auto-adjudicated and approved without receipts ... If the health plan has different copayment amounts for a particular type of charge, any valid combination of copayment amounts may be approved, up to five times the highest possible copayment amount ...