How to Read Your Explanation of Benefits (EOB) Statement

After you visit a doctor or hospital, you’ll likely receive two documents: a bill from the provider and an Explanation of Benefits (EOB) from your insurance company. Many people confuse the EOB for a bill—but it’s not. The EOB is a summary of how your insurance processed the claim. Understanding it can help you spot errors, avoid overpaying, and track your progress toward meeting your deductible. In this guide, we’ll walk you through each section of a typical EOB and explain what to do if something looks wrong.

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What Is an EOB?

An EOB is a document from your health insurer that explains:

  • What service was billed
  • How much the provider charged
  • How much your insurance approved
  • How much you owe (if anything)
It also shows how the charge applies to your deductible, copay, or coinsurance. Importantly, **an EOB is not a bill**—you don’t pay it. You pay the actual bill from your doctor or hospital, after confirming it matches the EOB.

Key Sections of an EOB

While EOBs vary by insurer, most include these elements:

1. Patient and Provider Information
Your name, date of service, and the provider’s name and address.

2. Billed Amount
The total amount the provider charged (e.g., $500 for an office visit).

3. Allowed Amount
The maximum your insurer agrees to pay for that service (e.g., $300). This is often lower than the billed amount, especially if the provider is in-network.

4. Not Covered Amount
The difference between billed and allowed amounts (e.g., $200). You typically don’t owe this if the provider is in-network—they’ve agreed to accept the allowed amount as full payment.

5. Your Responsibility
What you owe, broken down into:

  • Deductible (if not yet met)
  • Coinsurance (e.g., 20% of allowed amount)
  • Copay (if applicable)

Example: Decoding a Real EOB

Let’s say you had a specialist visit with these details:

  • Billed amount: $400
  • Allowed amount: $250
  • Your deductible: $1,000 (you’ve paid $800 so far)
  • Coinsurance: 20% after deductible
Your EOB would show:
  • $200 applied to your deductible (now at $1,000)
  • $50 coinsurance (20% of remaining $250)
  • Total you owe: $50
The provider cannot bill you for the $150 difference between $400 and $250 if they’re in-network.

Common EOB Errors to Watch For

1. Wrong Service Date or Provider
Could indicate identity theft or billing for services you didn’t receive.

2. Duplicate Charges
The same service billed twice.

3. Out-of-Network Billed as In-Network
You may owe more than expected.

4. Deductible Not Applied Correctly
Especially common early in the plan year.

If you spot an error, call your insurer first. If the issue is with the provider’s billing, contact their office with a copy of your EOB.

How EOBs Help You Track Annual Costs

Your EOB shows how each service affects your:

  • Deductible progress
  • Out-of-pocket maximum
  • Remaining benefits (e.g., physical therapy visits)
Keep all EOBs in a folder (digital or physical) to monitor your spending and prepare for tax-deductible medical expenses.

EOB vs. Bill: What’s the Difference?

| Document | Sent By | Purpose | Action Required | |----------|----------|--------|------------------| | **EOB** | Insurance company | Explains claim decision | Review for accuracy | | **Bill** | Doctor/hospital | Requests payment | Pay only after matching to EOB | Never pay a medical bill without first comparing it to your EOB.

Key Takeaway

Don’t ignore your EOBs. They’re a powerful tool to ensure you’re charged fairly and to understand how your insurance works. By reviewing them regularly, you can catch mistakes early, avoid surprise bills, and make smarter decisions about your health care spending.

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