How to read an Explanation of Benefits (EOB) for a parent or spouse
By the Folkswise team · Updated · 6 min read · How we write these guides
If your parent or spouse has a Medicare Advantage plan, a Part D drug plan, or insurance through an employer or retiree plan, the insurance company mails an Explanation of Benefits (EOB) after it processes claims. It isn't a bill. It's the insurer's record of what it was charged, what it paid, and what's left for the patient, which makes it the best tool you have for checking a bill.
Who sends an EOB, and when
- Medicare Advantage plans send an EOB for medical claims, usually after a month in which claims were processed.
- Part D drug plans send an EOB monthly, as long as at least one prescription was filled in the past month.
- Employer, retiree and Marketplace plans send EOBs too, by mail or in the plan's website or app.
- Original Medicare doesn't send an EOB. It sends a Medicare Summary Notice instead (see our MSN guide).
The columns, in plain English
Every insurer lays the EOB out a little differently, but the same five numbers are almost always there.
- Amount billed (or “provider charges”): the provider's list price. It's usually far more than anyone actually pays.
- Allowed amount (or “plan discount” subtracted from the billed amount): the price the plan agreed to for that service.
- Plan paid: what the insurer sent the provider.
- Deductible, copay and coinsurance: the parts of the allowed amount the patient is responsible for.
- What you may owe (or “patient responsibility”): the most the provider should bill your loved one for that line. This is the number to compare with the bill.
What to check, line by line
- Did your loved one actually get each service, on that date, from that provider?
- Is anything listed twice, or for a date they weren't there?
- When the bill arrives, is it asking for more than “what you may owe”? If so, call the provider's billing office with the EOB in hand.
- Is a line marked denied, or “not covered”? Look for a short code or note next to it. It explains why, for example a missing referral, a service the plan considers out of network, or missing paperwork from the provider.
- If your loved one has a second insurance (Medicaid, a retiree plan, TRICARE), was the claim sent on to it?
If a claim was denied
Many denials are paperwork problems the provider can fix by resubmitting the claim, so call the provider's billing office first and ask whether they will correct and resubmit it.
If the plan itself refused to pay and you disagree, your loved one can appeal. In a Medicare Advantage plan, the first step is asking the plan for a “reconsideration” within 65 days of the date on the plan's denial notice. Employer and Marketplace plans have their own appeal deadlines, printed on the EOB or denial letter. Our appeals guide walks through the steps.
Keep them together
Bills often arrive weeks after the EOB, and sometimes months later. Keep EOBs for at least a year, grouped by provider, so you can match each bill to the line that shows what's actually owed.
Common questions
- Do I have to pay an Explanation of Benefits?
- No. An EOB is a statement, not a bill. Wait for the provider's bill, then check it against the EOB's “what you may owe” amount before paying.
- What's the difference between an EOB and a Medicare Summary Notice?
- They do the same job for different coverage. Medicare Advantage, Part D and private plans send EOBs. Original Medicare sends a Medicare Summary Notice every 4 months.
- Why is the bill higher than the EOB says we owe?
- Sometimes the provider sent the bill before the insurance finished processing, or made a billing error. Call the billing office, give them the EOB's claim number, and ask them to rebill based on what the insurance allowed.
- What do the codes on an EOB mean?
- Most are standard claim adjustment reason codes or remark codes that explain why a line was paid, reduced or denied. The EOB usually has a key on the last page; if not, call the number on the insurance card and ask what the code means for that claim.