How do "deductible" and "co-pay" differ in health insurance?

The distinction between a deductible and a co-pay is crucial for understanding health insurance plans. A deductible refers to the fixed amount a policyholder must pay out-of-pocket for healthcare services before their insurance begins to cover any expenses. This means that until the deductible is met, the insured is responsible for full costs of the care they receive.

On the other hand, a co-pay is a specific amount that a policyholder pays for particular services after the deductible has been met. This co-pay generally remains constant for each visit to a doctor or for specific services, such as prescriptions, ensuring that the insured has a predictable expense associated with their healthcare usage.

Understanding this difference is important because it helps individuals budget for their healthcare expenses and comprehend how their insurance operates. The other choices either misconstrue the functionality of these terms or present limitations that do not capture their broader application in health insurance contexts.