EOB Meaning: Here’s What It Means and How To Use It

An explanation of benefits (EOB) is a written statement that provides more details about your health insurance coverage and costs, including the dates when you received specific medical services or treatments and which healthcare providers were involved. 

An EOB also includes detailed codes that describe which medical service was provided for your treatment or medication. 

The codes will vary depending upon which type of health insurance plan you have. Your EOB may also include additional information such as contact information for your doctor or instructions on how to appeal a denied claim.

Read on for more information about an EOB and why it’s essential! 

What Is an EOB? 

The abbreviation EOB stands for “explanation of benefits.” 

Health insurance companies send these to the account holder after receiving a medical service and billing their insurer. EOBs outline what services were charged, how much was paid, and any remaining balance owed. 

EOBs explain which medical services, medications, and treatments have been billed to your health insurance company and whether or not they need to pay any additional out-of-pocket (OOP).

In an emergency, health insurance companies use the Explanation of Benefits to tell account holders this information. The EOB provides details on medical services and treatments rendered by a doctor or hospital.

Your health plan administrator (HPA) will send out an EOB to let you know how much they have paid on your behalf and the dollar amount of what’s left for you to pay. If there are any questions or if you don’t receive an EOB by the time it’s supposed to be mailed, contact the HPA so they can help resolve any issues. 

In addition to the explanation of benefits, your health insurance company may send you more information that could include contact information for your healthcare provider or instructions on how to appeal a denied claim. Your EOB will also tell you how much money was spent on each category of service and what was covered by your policy.

Why Are Health Insurance Benefits Important? 

When you sign up for a health insurance plan, you’ll be presented with an EOB. Now that you know what to expect from your EOB, let’s talk about why it’s crucial to get health insurance in the first place.

Health insurance is essential because it provides financial protection against the cost of healthcare. It helps you access health care by providing coverage for various services, including preventive care, hospitalization and surgeries, emergency care, prescription drugs, and more.

In addition, health insurance helps you get the proper care at the right time. Whether you need a procedure, have a medication prescribed by your doctor, or need physical therapy after an injury, health insurance makes the process of getting treatment easier.

If you have health coverage through your employer or your state’s Medicaid or Medicare program, it’s easier for you to get the care that meets your needs when they arise. You don’t have to worry about whether or not something is covered by your plan or how much money each visit will cost. 

Your plan will cover the necessary expenses related to treatment for an illness or injury (though there may be limits on what’s covered).

What Are the Additional Benefits of Health Insurance?

Some of the other significant benefits of health insurance include: 

• Healthcare coverage can help people get better faster by providing access to specialists who treat rare illnesses and injuries.
• Health insurance enables people to receive ongoing treatment after an initial diagnosis.
• Health insurance covers rehabilitation services such as physical therapy after hospitalization and other medical treatments.
• Health insurance provides preventive screenings like mammograms, colonoscopies, and vaccinations.
• Health insurance allows necessary prescriptions to be filled when managing chronic conditions.

What Are Copays and Deductibles? 

Many people do not understand what copays, coinsurance, and deductibles are. 

In fact, many insurance plans don’t make it easy to understand these terms, and they aren’t outlined in your EOB in many cases. The good news is that once you know what they mean and how they work together, you can take control of your health care costs because you will see when you need to pay more out-of-pocket. 

Copays Explained

A copay is an amount you pay for the healthcare service, like $20 to see your primary care doctor or $30 for an urgent care visit. You’ll likely have a copay if you get a prescription filled at the pharmacy. Copays help lower premiums by not having insurance companies cover 100% of all services or medications.

Deductibles Explained

A deductible is an amount you’d have to spend before your insurance coverage kicks in. This can range from $0 to several thousand dollars annually, depending on your health plan and other factors (like if it covers certain types of services). 

Your employer may offer plans that include different levels of coverage for individuals based on their place within the company’s hierarchy (e.g., executives will usually have better options than associate employees).

Knowing these concepts can help you functionally understand how network providers use disclaimers, reductions, and dates of service to regulate health services. 

If you’re looking for better ways to pay for healthcare for yourself and your dependents, using this knowledge can help you dramatically. 

Conclusion

Contact your health insurance company if you have any questions about your EOB. They should be able to provide you with more information about what’s included in the explanation of benefits and how it applies to your coverage. 

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Sources: 

EOB | Cambridge English Dictionary.

Definition of EOB | NCI Dictionary of Cancer Terms

EOB | Medical dictionary