What does 'co-payment' refer to in healthcare?

In healthcare, 'co-payment' refers to a fixed fee that members are required to pay for specific healthcare services or medications. This concept is part of many health insurance plans, including Medicare Advantage, as a cost-sharing mechanism designed to make healthcare more affordable for members while also controlling the utilization of services.

When a patient receives care, they typically pay this predetermined amount at the time of service, which can vary depending on the type of service rendered or the specific health plan. For instance, a member may have a $20 co-payment for a doctor's visit and a different co-payment for a specialist or prescription medication. This structured cost helps ensure that patients have some financial responsibility, which can promote more thoughtful decisions regarding healthcare usage.

The other options do not accurately define a co-payment. While the total billed for a medical procedure reflects the overall cost of care, it doesn't pertain to any fixed out-of-pocket payment required by the patient. Similarly, the annual fee for maintaining health insurance typically refers to premiums, not co-payments. Moreover, paying a percentage of medical costs is known as co-insurance, which is different from the fixed amount designated as a co-payment.