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Knowing how to read an EOB is helpful in understanding your health insurance plan.
What is an Explanation of Benefits?
An EOB is a statement from your health insurance plan describing what costs it will cover for medical care or products you’ve received. The EOB is generated when your provider submits a claim for the services you received.
The insurance company sends you EOBs to help make clear:
- The cost of the care you received
- Any money you saved by visiting in-network providers
- Any out-of-pocket medical expenses you’ll be responsible for
Is my Explanation of Benefits a bill?
No. It is simply a statement of the medical services you received and details on how you and your plan will share costs. You will not use this to pay any outstanding bill.
How to read an EOB
Remember that EOBs state the costs associated with your care, but they are not bills. These documents are fairly standard among insurance companies. Here is a description of what each page of an EOB contains:
Page 1 summarizes the following:
- Your patient details
- The medical services you received and from who
- Amount billed: Cost of those services
- Discounts: Any money you saved by accessing care or medical products from within your plan’s network of providers
- Amount paid by your health insurance plan
- Amount not covered: What costs your health plan did not cover
- Amount that may have been paid from spending accounts, such as a health reimbursement account (HRA), if applicable
- Any outstanding amount you are responsible for paying
Page 2, contains a glossary of the terms and definitions included on your EOB, as well as instructions for how you can appeal a claim, if necessary.
Page 3, provides more specific details about the cost of the care you received.
Depending on your health plan, page 3 may also reflect what portion of your out-of-pocket medical expenses count toward your annual deductible.
Additional information, may include language assistance instructions, as well as more specific details about filing an appeal in your state of residence.
How do EOBs work?
A health care provider will bill your insurance company after you’ve received your care. Then you’ll receive an EOB. Later, you may receive a separate bill for the amount you may owe. This bill will include instructions on who to direct the payment to--either a health care provider or your health insurance company.
EOBs are a tool for showing you the value of your health insurance plan. You see the cost of the services you received and the savings your plan helped you achieve. EOBs also help you gauge how much money you may have left in accounts related to your plan. For some plans, EOBs also show you how close you may be to meeting your annual deductible. Once your deductible is met, your plan begins to help you pay for services.