How do co-payments generally differ from deductibles?

Co-payments are typically defined as fixed amounts that an insured individual is required to pay for specific medical services at the time of service, such as a doctor's visit or a prescription. This means that every time a person receives a particular type of care, they know exactly how much they will pay out-of-pocket for that service, making co-pays predictable and easy to budget for.

On the other hand, deductibles refer to the total amount that an insured individual must pay out-of-pocket for healthcare services before their insurance begins to cover additional costs. Deductibles are generally set at a certain amount that needs to be paid annually and can vary widely from one insurance plan to another.

The option that states co-payments are fixed costs per service while deductibles are amounts paid before coverage accurately captures this fundamental difference. Co-payments occur at the time of service, whereas deductibles must be fulfilled first. Understanding this distinction is crucial for navigating health insurance and planning for medical expenses effectively.