Kathy Walsh’s job is to help Connecticut residents deal with health insurance issues. Often, that means untangling confusing parts of the system. And one common culprit is a form known as the “explanation of benefits.”
You might recognize it: It’s the form insurance companies send to members with several columns and numbers and the label “This is not a bill.”
“I think people are completely lost on those,” said Walsh, the principal examiner in the insurance department’s consumer affairs division. “There’s just a lot of figures on there.”
The purpose of the form is to show people how their medical claims were handled and how much they’ll have to pay, but Walsh said they’re often misinterpreted.
“People perceive this as, ‘The insurance company didn’t approve my claim,’” Walsh said. “That’s not true.”
To understand the form, it helps to know how medical services get billed and paid for. In short, there are three different numbers involved: What your health care provider charges, what your insurance company pays, and what portion of it you’re responsible for.
If you go to a health care provider in your insurance company’s network, the provider has agreed to a certain payment rate for treating you. Regardless of what the provider bills, it’s that negotiated payment rate that matters to your final cost.
The other important factor in your cost is how your plan works. If you have to meet a deductible before the plan begins paying for your coverage, you might be responsible to pay the full negotiated price. Or you might have co-insurance that requires you to pay a percentage of the cost. Whatever you owe will be listed as the patient’s responsibility. That’s the key number.
So what should you do when you get one of these forms?
Walsh advised people to hold onto them for record-keeping purposes. If you’re responsible for some or all of the costs, the provider will send a bill. When you get it, you can check the bill against the explanation of benefits to ensure it’s the right amount.
Still confused? Here are sample explanations of benefits from insurers. Click on the yellow tabs or boxes to read the notes.
Aetna
Anthem Blue Cross and Blue Shield
Here’s a guide to Anthem’s version of the form.
ConnectiCare
Here’s a guide to ConnectiCare’s version of the form, called a claim summary.
HealthyCT
This example includes information about several different medical claims.