An explanation of benefits (EOB) is a document provided to you by your insurance company after you had a healthcare service for which a claim was submitted to your insurance plan. This article will explain what information you'll find on an EOB, how this is useful in terms of your financial planning for the year, and why it's important to make sure that all of the details are correct. Hoxton / Sam Edwards / Getty ImagesYour EOB gives you information about how an insurance claim from a medical provider (such as a doctor, hospital, or lab) was paid on your behalf—if applicable—and how much you're responsible for paying yourself. You should get an EOB regardless of the portion of the bill that the insurer paid. Depending on the circumstances, the insurer might not be paying any of the bill. This could be the case if the service wasn't covered by your plan, or if the full cost was applied to your deductible and deemed your responsibility to pay. But in other circumstances, the EOB will indicate that the insurer has paid some or all of the bill. That would leave you with either a portion of the charges or no out-of-pocket costs at all. You should get an EOB if you have insurance you purchased on your own, a health plan from your employer, or Medicare (if you have Original Medicare, this will be called a Medicare Summary Notice; if you have a Medicare Advantage or a Medicare Part D plan, the document will generally be called an Explanation of Benefits). And depending on where you live, you might get an EOB if you're enrolled in Medicaid and receive healthcare services.
If you are a member of a health maintenance organization (HMO) that pays your healthcare provider through capitation (a set amount of money each month to care for you), you may not receive an EOB because your practitioner is not billing the insurance company. This type of arrangement is not common, but it's possible that you could just receive a receipt for your copay instead of an itemized EOB. Your EOB has a lot of useful information that may help you track your healthcare expenditures and serve as a reminder of the medical services you received during the past several years. A typical EOB has the following information, although the way it's displayed may vary from one insurance plan to another:
Your EOB will generally also indicate how much of your annual deductible and out-of-pocket maximum have been met. If you're receiving ongoing medical treatment, this can help you plan ahead and determine when you're likely to hit your out-of-pocket maximum. At that point, your health plan will pay for any covered in-network services you need for the remainder of the plan year.
An example of an EOB:
Some math: Dr. David T. is allowed $65 (his charge of $135 minus the amount not covered of $70.00 = $65.00). He gets $15.00 from Frank and $50.00 from Medicare. Healthcare providers’ offices, hospitals, and medical billing companies sometimes make billing errors. Such mistakes can have annoying and potentially serious, long-term financial consequences.
Your EOB should have a customer service phone number. Do not hesitate to call that number if you have any questions or concerns about the information on the EOB. Your EOB is a window into your medical billing history. Review it carefully to make sure you actually received the service being billed, that the amount your healthcare provider received and your share are correct, and that your diagnosis and procedure are correctly listed and coded. It's also important to make sure that your records reflect the same numbers that the EOB show, in terms of your progress toward your deductible and out-of-pocket maximum for the year. Once you've met your deductible, your health plan will start paying for more of your care. And once you've met your out-of-pocket maximum, the plan will start paying 100% of your covered, in-network costs for the rest of the year. So it's important to make sure that these amounts are accurately reflected on each EOB. Insurers generally send EOBs to the primary insured, even if the medical services were for a spouse or dependent. This can result in confidentiality problems, especially in situations where young adults are covered under a parent's health plan, which can be the case until they turn 26. To address this, some states have taken action to protect the medical privacy of people who are covered as dependents on someone else's health plan. But it's important to understand that as a general rule, states cannot regulate self-insured health plans, and these account for the majority of employer-sponsored health plans. An explanation of benefits (EOB) is a document that a health plan sends to a member after a medical claim is processed. The EOB will show a variety of information, including details about the medical treatment, the amount that was billed, the amount that the health plan allows for that service, the amount the health plan paid (if any), and the amount that the patient owes. The EOB will also generally show how much the member has accumulated toward their deductible and out-of-pocket maximum so far that year. It may be tempting to just ignore EOBs, especially if you have substantial claims and numerous EOBs arriving in your mailbox. But it's important to at least scan each EOB to make sure that the details make sense. This will give you a good idea of what to expect in terms of medical bills from providers, since they use their own version of that same EOB in order to process billing statements. And it will also help you know what to expect in terms of your potential future medical bills for the remainder of the year. |