Understanding Your Insurance
Healthcare and insurance terminology can be confusing. Use this glossary to better understand common insurance and billing terms.
Copay (Copayment)
A fixed amount you pay for a healthcare service, such as a doctor's visit or prescription.
Deductible
The amount you must pay for covered healthcare services before your insurance begins sharing costs.
Coinsurance
The percentage of a covered service that you are responsible for paying after your deductible has been met.
Out-of-Pocket Maximum
The most you will pay for covered healthcare expenses during your plan year.
In-Network Provider
A healthcare provider who has contracted with your insurance company to provide services at negotiated rates.
Out-of-Network Provider
A healthcare provider who does not have a contract with your insurance company.
Coordination of Benefits (COB)
The process insurance companies use to determine payment responsibility when a patient has more than one insurance plan.
Benefits Verification
The process of contacting an insurance company to confirm eligibility, coverage, and patient responsibility.
Medical Necessity
Services or treatments that an insurance company determines are appropriate and necessary for diagnosis or treatment.
Prior Authorization
Approval required by some insurance plans before certain services or procedures will be covered.
Gap Exception
A request asking an insurance company to cover services at in-network rates when no appropriate in-network provider is available.
Good Faith Estimate
An estimate of expected charges provided to uninsured or self-pay patients under federal regulations.
Explanation of Benefits (EOB)
A statement from your insurance company explaining how a claim was processed. An EOB is not a bill.
Balance Billing
The difference between the provider's charge and the amount paid by insurance, when permitted by law and contract.
Allowed Amount
The maximum amount your insurance company considers payable for a covered service.
Important:
Definitions provided on this page are intended for general educational purposes only. Insurance plans vary, and coverage details differ between policies. Verification of benefits is based on information provided by your insurance company at the time of inquiry and is not a guarantee of payment or coverage. Final payment determinations are made by your insurance company when claims are processed.