Benefit Basics: Navigating your Health Plan Like a Pro – Part 2: What To Do When You Receive a Medical Bill

Opening a medical bill can feel like deciphering a foreign language, but with the right approach, it doesn’t have to be overwhelming. In this post, we’ll guide you through the steps to understand what you actually owe, empowering you to handle medical bills with confidence and clarity.

Knowing how to tackle a medical bill is critical, but it all starts with understanding your plan. Refer to Part 1: 'Top 10 Health Insurance Terms That Actually Matter' for a breakdown of essential concepts and watch out for Part 3: 'Considerations When Choosing a Health Plan-No Regrets Later' for advice on selecting the right coverage to avoid surprises.

Part 2: I Got a Medical Bill. What Now?

Opening a medical bill can feel overwhelming, but understanding how to read it and what you actually owe is key to avoiding unnecessary stress. With a little know-how, you can tackle that bill like a pro and ensure you’re paying only what’s required.

Step 1: Start with Your Explanation of Benefits (EOB)

Your Explanation of Benefits (EOB) is your go-to resource for understanding a medical bill. This document outlines what the provider billed, what your insurance paid, and what’s left for you to cover. Think of it as a map that explains how the numbers on your bill were calculated. If you don’t see an EOB, check your insurance provider’s portal or contact their customer service for a copy.

Step 2: Understand Key Terms on Your Bill

When you’re faced with a medical bill, certain terms are critical to breaking down the cost:

• Allowable Amount: This is the maximum amount your insurance will pay for a particular service. For example, if your doctor charges $200 but the allowable amount is $150, your insurance will only cover up to $150, and the remaining $50 is adjusted down, or written off.
• Discount Amount: If you visited an in-network provider, you’ll benefit from a negotiated discount. This reduces the amount owed and highlights the advantages of staying in-network.
• Coinsurance and Co-pay: After discounts and adjustments, the remaining amount is split according to your plan. You’ll either pay a flat fee (co-pay) or a percentage of the allowable amount (coinsurance).

Step 3: Calculate Your Out-of-Pocket Responsibility

Let’s walk through an example:

You receive a surgery bill for $10,000. Under your plan:

• The allowable or contracted amount is $7,000.
• Your deductible is already met, so you’re responsible for 20% coinsurance.
• You owe $1,400, which is 20% of $7,000.

However, if you went out-of-network, the entire $10,000 could be your responsibility. This is why it’s crucial to use in-network providers whenever possible.

Conclusion

Receiving a medical bill doesn’t have to be a source of panic. By reviewing your EOB, understanding the allowable and discount amounts, and calculating your share based on coinsurance or co-pay, you can take control of the process. When in doubt, reach out to your insurance provider for clarification. Knowledge is power—and it can also save you money.

For a detailed guide packed with practical examples and tips to manage your medical bills effectively, check out my LinkedIn article, "Benefit Basics: Navigating Your Health Plan Like a Pro." It’s a great resource to help you feel informed and in control when those bills arrive in your mailbox.