The language used in medical bills, health care forms and other paperwork can be very confusing. Here are some plain language explanations of some of them.
Allowed Amount – what the insurance company believes should be the price for the medication or service
Balance Billed – the difference between what the provider believes should be the price for the medication or service and the insurer’s allowed amount – you will have to pay this amount
Coinsurance – after you have paid the deductible, coinsurance is the percentage of the cost of the allowed amount you will have to pay
Copay – a fixed amount you will have to pay for covered prescription medications and medical services, due when you receive the service
Deductible – your insurance won’t pay anything until you have paid this amount total for the year
Evidence of Coverage – an explanation of your insurance plan, including what is covered and how much you pay
Explanation of Benefits - Not a bill! This is a summary of charges, insurance payments, and your payments for a month.
Formulary – lists the medications your insurer will pay for
In-Network Providers – providers or facilities with a contract with your insurer. It usually will cost you less to use an in-network provider than to go to an out-ot-network provider.
Step Edits (Step Therapy) – requirements to be met before your insurer will pay for a medication. You may have to try using less effective medications before they will authorize what your doctor prescribes.
Read all insurance-related text carefully. Look up or ask for an explanation of any term you do not understand.
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