What is the difference between a deductible and a copayment?

The distinction between a deductible and a copayment is essential for understanding how health insurance plans function. A deductible is the amount that an insured individual must pay out-of-pocket for medical services before the insurance begins to cover costs. This means that once the deductible is met, the insurer will start to pay for covered services according to the terms of the policy. On the other hand, a copayment is a fixed amount that the insured has to pay at the time of receiving a healthcare service, regardless of whether the deductible has been met or not. This could apply to visits to a doctor, specialist, or for prescription medications.

Thus, the correct choice accurately captures these definitions. Knowing how each component works is crucial for navigating health insurance benefits efficiently.