Understanding your explanation of benefits statement

Stephanie Taylor Christensen

Shortly after you receive medical care using your insurance coverage, you'll receive an explanation of benefits (EOB) statement in the mail.

An EOB is a summary statement (not a bill) sent from your insurance company. According to the U.S. Department of Health and Human Services (HHS), it should include:

  • A list of claims processed since the last EOB was sent.
  • A summary of the plan's costs so far this year.
  • The cost of treatment, the amount the insurer covers (and doesn't cover) and the amount you'll likely need to pay to the health care provider.
  • Details about the plan, like the deductible, co-insurance and total out-of- pocket costs. If you have changed health insurance plans midyear, the EOB will include information about costs that were transferred.
  • Corrections to any errors from the last EOB.

If the insured or a covered family member takes prescription medication regularly, an EOB will highlight updates to the prescription drug plan that might affect current coverage, according to HHS. If anything has changed, show the EOB to a health care provider -- you'll need to confirm whether the medications that are covered are an appropriate, cost-effective alternative to medications that are no longer covered.

What to do with an EOB

Look over your EOB carefully before saving it for your records. The EOB is a valuable verification tool for charges and costs. According to Medical Billing Advocates of America, eight out of 10 medical bills contain errors. Consumer Reports recommends checking every EOB for simple data errors, like the wrong name or insurance-group number.

Ensure that services reflected on the EOB actually were provided, and cross-reference receipts from prescription drug purchases against the EOB. If it lists any treatments or drugs you never received, you may be a victim of medical identity theft.

If the amount billed is higher than your doctor led you to believe it would be, Blue Cross Blue Shield recommends reporting it to your health insurance company. And if you see words like "kit," "tray" or "room fees," check for possible duplicate charges. According to Consumer Reports, those terms can be red flags for overcharges.

Call your provider and question any medical jargon you don't understand. You should also check the EOB to ensure that the doctor's diagnosis of your medical condition aligns with the diagnosis code on your EOB.

If you find an error, call your health insurance provider and take detailed notes of the conversations until the matter is resolved, Consumer Reports recommends. If you can't get the problem resolved before the medical bill is due, pay the part of the bill not in dispute. Check your credit report if the issue is not resolved within 60 days to ensure your account has not been marked delinquent.