Understanding Your Explanation of Benefits

Copay

What is the purpose of an explanation of benefits? The purpose of an Explanation of Benefits is to explain how insurance companies pay for medical care and products. The EOB is not a bill but a breakdown of the expenses and savings a patient can expect. Understanding the EOB can be necessary for tracking expenses and checking for any errors in billing. 

First, you must understand the difference between the EOB and the bill. An EOB is a written explanation of the coverage you received from your health insurer. It shows the name of the covered provider, the date(s) of service, and the amount billed, allowed, and paid. The Explanation of Benefits outlines the patient's responsibilities based on the terms of the plan's benefits.

Coinsurance

In the case of a health insurance policy, understanding your coinsurance explanation of benefits is crucial to getting the most from your insurance plan. The coinsurance amount represents the portion of the cost of covered medical services that you are responsible for after the deductible. The amount you pay depends on the care or service you need. The amount is usually shown as a percentage of the total cost. In most cases, the insurance company pays the rest of the price.

The percentage you'll pay is the coinsurance amount, which varies from plan to plan. Most programs have coinsurance, the percentage you'll have to pay after deducting. After your deductible is met, you'll pay 30% of the cost. Your copayment depends on the plan, so read your Explanation of Benefits carefully before deciding.

Annual Maximum

To understand your dental plan's benefits, you must first understand your annual maximum. A yearly maximum is coverage your insurance provider provides within a calendar or fiscal year. After you've used your annual maximum, you may be responsible for the remaining amount. You can view the chart below to get a clearer picture. If you know the information, you can make the most informed decision about the cost of your dental care.

Reimbursement check

If you are receiving a reimbursement check, you must understand your reimbursement check and explanation of benefits (EOB). The EOB is not a bill; it is a report of your insurance coverage based on your doctor's charges and the type of plan you are covered under. Call your insurance company's Member Services when in doubt and ask for clarification.

The explanation of benefits (EOB) is a document that explains how your health insurance company will process your medical claims. While it isn't a bill, it does show you how the amount you owe has been allocated. Understanding the EOB helps ensure you receive the total discount or benefit you are due. Always read the EOB carefully, as it contains information that could result in an unexpected bill.