What is an "Explanation of Benefits" (EOB)?

An "Explanation of Benefits" (EOB) is a crucial document issued by health insurance companies to policyholders after a claim has been processed. This statement outlines the services provided, the amount billed by the healthcare provider, the amount that the insurance covers, and any outstanding patient responsibilities such as deductibles, copayments, or coinsurance.

By detailing which services were covered and how much the insurance company paid versus what is owed by the patient, the EOB helps individuals understand their financial obligations regarding their healthcare expenses. It serves as a transparent breakdown of the insurance claim process and allows patients to verify the accuracy of the billing, ensuring they are aware of any amounts due to the provider as well.

Other options do not accurately capture the essence of an EOB. For instance, while health insurance premiums are related to coverage, they are not part of the EOB, which focuses specifically on claims and costs incurred for medical services. Additionally, a summary of medications dispensed and a financial report of a pharmacy are unrelated to the function of an EOB, as neither addresses insurance claims or patient out-of-pocket costs in the context of health services.