A copay, or copayment, is a fixed amount that a patient pays out-of-pocket for a covered healthcare service or prescription medication before receiving the service. Copays are a form of cost-sharing between the individual and their insurance company, where the insurer covers the remaining portion of the medical expense. Copays can vary for different services within the same plan, like drugs, lab tests, and visits to specialists. Generally, plans with lower monthly premiums have higher copays, while plans with higher monthly premiums usually have lower copays. Copays are used by insurance companies to share healthcare costs and prevent moral hazard. However, a copay may also discourage people from seeking necessary medical care, and higher copays may result in non-use of essential medical services and prescriptions, rendering someone who is insured effectively uninsured because they are unable to pay higher copays. Copays are more common with managed care plans, such as HMOs, but can also be incorporated into other plans, such as PPOs.