Final answer:
Co-payments or co-pays are the fixed amounts patients pay for services like office visits or prescription medications on the day of service. Deductibles are the amounts to be paid out-of-pocket before insurance starts paying, and co-insurance is a shared percentage of costs covered by both the patient and insurer.
Step-by-step explanation:
The flat rates that a patient pays on the day of service for an office visit or prescription medications are known as co-payments (co-pays). Co-pay is a fixed amount, such as $20 for an office visit or a specific amount for prescription medications, that insurance subscribers must pay out-of-pocket for their healthcare services.
Health insurance plans often include a deductible, which is a specific amount that must be paid by the insured before the insurance coverage kicks in. After the deductible is met, health insurance typically covers a significant portion of the costs, such as 75 percent of prescription drug costs up to a certain limit, for example, $2,250.
Additionally, individuals may also be responsible for co-insurance payments, which represent a percentage of the costs that the insured covers alongside the insurer. These cost-sharing mechanisms are designed to lower the overall cost of healthcare to the individual but do not decrease it for insurance companies or society as a whole.