Which term describes the amount insurance will pay for a covered service?

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Multiple Choice

Which term describes the amount insurance will pay for a covered service?

The idea being tested is how insurance determines what it will pay for a covered service. The amount the insurer will pay is the eligible expense—the portion of the billed charge that the plan recognizes as payable under its rules. This amount can be influenced by whether the service is covered, any negotiated allowed amounts, and the plan’s limits. After that eligible amount is established, you still may owe other cost-sharing amounts (like part of the deductible or coinsurance), depending on the plan. For example, if a physical therapy session is billed at $100 and the plan has a deductible of $20 and coinsurance of 20%, the eligible expense might be $100. You would first meet the deductible ($20), then the insurer would pay 80% of the remaining amount ($80), which is $64, leaving you responsible for the $20 deductible plus 20% of the $80 ($16). The total would still equal the $100 charged. Copayments are fixed amounts paid at the visit, and coinsurance is the percentage you pay after the deductible, while the eligible expense is the amount the insurer considers for payment under the policy.

The idea being tested is how insurance determines what it will pay for a covered service. The amount the insurer will pay is the eligible expense—the portion of the billed charge that the plan recognizes as payable under its rules. This amount can be influenced by whether the service is covered, any negotiated allowed amounts, and the plan’s limits. After that eligible amount is established, you still may owe other cost-sharing amounts (like part of the deductible or coinsurance), depending on the plan.

For example, if a physical therapy session is billed at $100 and the plan has a deductible of $20 and coinsurance of 20%, the eligible expense might be $100. You would first meet the deductible ($20), then the insurer would pay 80% of the remaining amount ($80), which is $64, leaving you responsible for the $20 deductible plus 20% of the $80 ($16). The total would still equal the $100 charged. Copayments are fixed amounts paid at the visit, and coinsurance is the percentage you pay after the deductible, while the eligible expense is the amount the insurer considers for payment under the policy.

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