Understanding Your Health Insurance Explanation of Benefits (EOB)

When you receive medical care, you will receive a bill from the healthcare provider and an Explanation of Benefits (EOB) from your insurance company. The EOB provides a breakdown of the costs associated with your care and how much your insurance will cover.

Deciphering the Amount Not Covered

One section of the EOB is titled “Amount Not Covered.” This section shows the charges that are not covered by your insurance. However, the total amount not covered may not equal the amount you owe. This is because the amount not covered includes charges that are considered write-offs.

Write-offs

Write-offs are amounts that the healthcare provider agrees to forgive as part of their contract with the insurance company. In other words, the healthcare provider has agreed to accept a lower payment from the insurance company than the amount billed. This is a common practice in the healthcare industry.

Example:

Let’s say you have an EOB that shows the following charges:

Radiology: $796
Medical Services: $1,550
Outpatient Lab: $788

The total amount of these charges is $3,134. However, your EOB may show that the amount not covered is only $2,400. This is because the healthcare provider has agreed to write off $734 of the billed charges.

Your Payment Responsibility

Your payment responsibility is the amount you owe after insurance coverage and write-offs have been applied. In the example above, your insurance covered 80% of the contracted amount, which means you are responsible for 20%. Therefore, your payment responsibility is 20% of $2,400, which equals $480.

Additional Considerations:

If you have questions about your EOB, do not hesitate to contact your insurance company.
Keep a copy of your EOB and receipts for medical expenses for tax purposes.
Remember, if you are struggling to pay your medical bills, there are resources available to help you. You may qualify for financial assistance or payment plans.

Conclusion

Understanding your health insurance EOB is crucial for managing your healthcare expenses. By understanding the concepts of write-offs and your payment responsibility, you can avoid confusion and ensure you are paying the correct amount for your care.