Of all the things you’ll invest in over your lifetime, health insurance tops the list of importance; after all, nothing is more important than your health. Like anything else you invest in, having a firm understanding of your health insurance policy is crucial.
When it comes to your health insurance, you’re going to hear a lot of terms and conditions, one of the most important of which is your explanation of benefits. But what exactly is an explanation of benefits and why is it imperative? Read on to learn more about this most basic – and most central – component of a health insurance policy.
Explanation of Benefits Explained
When you receive a medical service – whether it’s routine preventative care, an emergency visit to the doctor, or a surgical procedure – if you have health insurance and the service was covered by your policy, you’ll receive an explanation of benefits.
Simply referred to as an EOB, an explanation of benefits highlights the details that pertain to a claim that has been processed (the medical service you received). It illustrates what portion of the services were covered by your insurance carrier and what portion of those services you are responsible for (if any). Sometimes, a benefit check will arrive with an EOB; however, typically, your insurance company will send the payment for the portion that they covered directly to the provider who offered your services. If you are responsible for any of the expenses, you’ll receive a bill from the provider; your deductible or copay, for example.
When Will You Receive an Explanation of Benefits?
You’ll receive an EOP whenever you receive a medical service and a claim for that service is submitted to your insurance carrier. For example, when you see your general practitioner for a well-visit, the medical professional will file a claim to your insurance company so that he or she can receive payment for the services that were rendered. Your insurance carrier will then issue you an EOB to let you know that your doctor has submitted a claim, how much of the services they are going to cover, and what amount you are responsible for covering yourself.
What Details does an Explanation of Benefits Highlight?
When you receive your EOB, you’ll see that it contains a lot of details; details that are pertinent to your health insurance, the services you received, the amount your insurance carrier covered, and the amount (if any) you are responsible for paying. It’s important to understand what information your EOB highlights so that you can keep tabs on your coverage and make sure that you aren’t being charged for services that your insurance should cover.
The information you can find on your EOB includes the following:
- The patient. If the service was for you, your name will be displayed on the EOB; if you have dependents and they received a medical service, their name will be featured on the EOB.
- ID number. Insurance companies issue each policyholder a unique ID number. That number is displayed on your insurance card and it will also be illustrated on your EOB. Make sure that the numbers match.
- Claim number. Medical professionals issue a claim number to all services they provide and file claims for.
- Medical professional. The name of the medical professional who treated you or one of your dependents will be displayed on the claim; if you had a well-visit, it would list your general practitioner, or if you had bloodwork done, it would list the name of the lab that drew your blood and tested it.
- Service provided. You’ll also see the type of service you received listed on your EOB; this service be described and a code will be assigned to it.
- Service rendered date(s). The date(s) the service was provided will be illustrated on the EOB. This will include the date the service began and the date it ended. For instance, if the claim was for a well-visit, start and end dates will be the same; however, if you were hospitalized, the start date will be the date you were admitted and the end date will be the date you were discharged.
- Charges billed. The monetary amount that a medical provider, hospital, laboratory, etc, billed your insurance carrier will be listed on the EOB.
- Amount covered. The monetary amount that your health insurance company covered for the services you received will be listed.
- Amount not covered. Any amount that your insurer didn’t cover will also be listed.
- Cost to patient. Lastly, the amount that you are responsible for covering will be featured on your EOB. If you don’t owe anything, the amount will display as 0; however, if any portion of the service wasn’t covered by your insurance – your deductible or copayment, or any service you received that your insurance doesn’t include – will be featured. You are responsible for paying this amount, and you will need to pay it directly to the provider who issued the service.
When you receive your EOB, make sure you review it. Mistakes can happen; by reviewing your EOB, you can ensure that you aren’t paying for services that you shouldn’t be responsible for. If an issue arises or you have questions, contact your health insurance company directly and refer to your EOB.