The term copayment is used to describe a small fee that is usually due at the time services are provided under managed medical plans such as health maintenance organizations (HMO), preferred provider organizations (PPO), and point of service (POS) plans.
Also known as copay, the copayment amount is usually described as nominal, or small, by health insurance plans. Typical copayment amounts are currently in the range of $5 to $25. While this is often positioned by plan administrators as the sharing of medical expenses, most view the charging of copayments as a way of ensuring that policyholders are not "overusing" their medical benefits.
Copay amounts can apply to prescription medications in addition to medical services. Insurance companies often require considerably higher copayments for brand-name drugs versus generic equivalents.
Since the copayment is the responsibility of the patient, it is related to other fee sharing arrangements such as deductible and coinsurance.