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What's an Explanation of Benefits (EOB) and How Do I Read It?
For Patients

What's an Explanation of Benefits (EOB) and How Do I Read It?

What's inside an EOB?

If you have health insurance, you may have come across the EOB medical abbreviation. But what does EOB stand for, exactly? In healthcare, EOB stands for Explanation of Benefits. An EOB is a document your insurer sends you after processing a claim. It lists the goods and services covered under your health insurance plan.

Patients often leave money on the table because they don’t understand which services are covered by their insurance and which are not. Reading your EOB carefully helps you learn how to get the most from your insurance benefits. If you’ve ever wondered, “What is an EOB?” or how to read an EOB, continue on! In this post we’ll go over a sample EOB to help you understand your health insurance benefits.

What is an EOB in Healthcare?

An EOB in healthcare is a document that explains your benefits for services you received. Your insurance will send you an EOB any time they process a claim.

Any good EOB will tell you this is not a bill. They break down what insurance covered and also the services that were not covered, which you may owe. But there is no action required when you receive an EOB. It is a good idea to review it for errors. If you still owe money for the healthcare service, you should receive a bill from your provider.

Healthcare EOB example

An Explanation of Benefits (EOB) example. This document from your health insurance company shows what your insurer covered from a claim and what you may owe.
An Explanation of Benefits (EOB) example. This document from your health insurance company shows what your insurer covered from a claim and what you may owe.

Let’s take a look at an EOB example and break down what’s included. Please note, EOB formats can vary depending on your insurance company. So, a Medicare EOB may look different than an Aetna EOB or a Blue Cross Blue Shield EOB. But, almost every EOB will contain the following:

1. Your Name and Address

2. Your Insurance Information

This section makes it easy for your insurer to identify you and your plan. It will typically include your member ID and group ID at minimum.

3. Patient, Claim, and Provider Details

This section identifies the specific claim described by the EOB.

4. Service Details

An EOB includes a table that normally lists individual services, the amount your insurer paid, your deductible and copay amounts. These tell you how much your insurer has agreed to cover how much you may owe. Double-check this section to make sure it lists services you actually used, and that the charges match what you expected to pay. 

The EOB’s table often includes these columns:

  • “Total Charged” or “Amount Billed” - This describes the cost that your healthcare provider or facility changed for the item or service.
  • “Amount Paid” - This is the amount that your insurance company actually paid the provider or healthcare facility.
  • “Notes”, “Reason Code”, or Remark Code” - This is where your insurance company can provide more details about an item or service.
  • “Patient responsibility” - This part of the table lists the portion of the charges that you pay. This includes things that your insurance does not cover, your deductibles, co-payments, and co-insurance amounts.

As we mentioned before, EOB formats can vary from insurer to insurer. Here are some additional columns you might find on your EOB:

  • “Allowed Amount” - This column shows the amount the insurance company has agreed or negotiated to pay providers and facilities for a type of item or service. You can learn more about that in our blog post on Allowed Amounts.
  • “Service Description” or “Type of Service” - This column briefly describes the item or service you were charged for so you can understand what your provider charged you for.

5. Total Amount of Benefits Claimed

At the bottom of the table, you should see a total, or sum, of all the charges for your healthcare service(s). This may also be listed as “Total Charges”, “Total Amount Charged”, or “Total Billed”.

6. Total Amount Your Insurer Paid

This shows the sum of all covered charges for your service(s).

7. Total You May Owe

The total you may owe is the difference between the charges and what your insurance covered. This includes co-payments, deductibles, co-insurance, and any other amounts not covered by insurance.

EOBs are not always exact. They usually will not reflect payments you already made at your provider’s office. For out-of-network services, your insurer usually estimates based on comparable past services. Also, you may run into issues with your claim. Portions of claims are often rejected due to small errors. Take heart, you can re-file out-of-network claims to get the reimbursement you’re owed! Better yet, let SuperBill do this for you.

Using Your Healthcare EOB to Make Financial Decisions 

EOBs tell you useful information for your budget, like how far you are from meeting your deductible. If you have met your deductible, congratulations! Now is the best time to schedule those doctor visits you've been putting off. Go ahead and pursue the healthcare items or services you need. Your deductible will start over at the beginning of next year or when a new health insurance plan begins. So don’t delay! If you wait too long, your healthcare provider might not have openings before time is up. It is up to you to make the most of your insurance benefits.

On the flip side, if you are far from meeting your deductible you may choose a different path. You will have to decide whether you can afford certain healthcare services right now. You may need to scale back on your other expenses to save up for healthcare services you need. 

When you review your EOB, know this: it is in your insurance company’s best interest to show how much money they saved you. But be wary: it is not in their best interest to show you how much you could have saved with another insurer's plan. If you are shopping for insurance plans, you can find advice on our post, How to Choose the Best Insurance Plan.

If you feel like you have overpaid for a service, contact your insurer. They do make mistakes, and it doesn’t hurt to double check! At the very least, you’ll get a better understanding of your health benefits.

What Should I Do with My Old EOBs?

Save your EOBs if you can! You may need them in the future to prove that certain costs were covered. For example, you might need old EOBs if a provider’s billing department makes a mistake. Or, if you claimed a medical deduction on your taxes, you may need your EOBs to show the IRS as proof. You can also compare your EOB to the final bill you receive from your healthcare provider to make sure things match up.

Additionally, reviewing your old EOBs can help you learn from your past mistakes. If your claims keep getting rejected, look over your old EOBs. There might be something you can do differently the next time you visit a new provider and file a claim. 

This process can be tedious (and use a lot of paper), so we recommend keeping your EOBs in an organized digital folder. You can usually log on to your insurer’s website to view and download paperless EOBs. A little extra effort up front to keep your files tidy could save you time and money down the road.

SuperBill Can Help With Your Healthcare EOBs

Are you overwhelmed with filing out-of-network claims to your insurance? Look to SuperBill! SuperBill helps you navigate your health insurance benefits. We file out-of-network claims for you, and appeal rejected claims to save you time and money. SuperBill’s team of insurance experts can also review EOBs from any claims they file. We want to make sure you are getting the best reimbursement possible!

You can read Getting Started with SuperBill to learn more about what we do. For more information about all things out-of-network, check out our Complete Guide to OON Reimbursement and Complete Guide to Superbills. Or, click the Get Started button to start saving right away!

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About the Author

Harrison Caruthers

Harrison is a software developer in the Bay Area. Before SuperBill, he worked as an engineer for Amazon in Madrid. While in Spain, Harrison developed an appreciation for both Mediterranean cooking and simplified healthcare systems. He returned to the Bay to co-found SuperBill with fellow Stanford grad Sam Schwager after mounting frustrations with US insurance networks.