Understanding Health Insurance

Take the guesswork out of health insurance in a few quick steps:

  1. Learn commonly used health insurance terms.
  2. Find answers quickly -- how coverage works to paying bills.
  3. Take the next steps to get coverage or get the most from your plan.

Still have questions? Contact us or visit one of our retail stores for in-person help. Get details below.

Common Health Insurance Terms

Many of the terms we use to describe complex insurance concepts can be difficult to understand. Get to know the terms and get a clear definition of each.

Deductible

The dollar amount you must pay for covered services in a benefit period before benefits are payable under the plan. The deductible does not include coinsurance, charges in excess of the allowed amount, amounts exceeding any maximum or expenses for non-covered services. Find your deductible amount on the Benefits page or read your Benefit Booklet for services that apply to your deductible.

In short:

A Deductible is the set dollar amount you pay toward covered medical services each benefit period before Blue Cross NC starts paying toward those services.

EOB (Explanation of Benefits)

EOBs show the price of a medical service, the amount Blue Cross NC will reimburse a provider (based on negotiated rates), what your plan paid for the service, and your member savings. You’ll also see how much of your deductible has been paid, and any copayments, coinsurance or other amounts you may owe. And, the EOB will show you how much you may be able save by choosing in-network providers. Try the EOB Search Tool to see the details about your processed claims.

In short:

Members receive an EOB after a visit to a doctor, healthcare provider, pharmacy or facility. An EOB lists details of the medical service received including date, amounts paid by Blue Cross NC, and cost the member may owe.

Copayment

A copayment1 is the fixed dollar amount you pay at the time a covered service is provided. Copayment amounts may vary depending on:

  • Service you receive
  • In-network vs. out-of-network provider or facility
  • Primary care physician/provider (PCP) vs. specialist
  • Type of prescription drug (generic or brand-name)

See your Benefits page in Blue Connect for a list of services covered by a copayment.

In short:

A Copayment is the set dollar amount you pay (for example, the $20 you pay when you check out at the doctor’s office) for medical services or prescription drugs at the time you receive them.

Coinsurance

Coinsurance is the sharing of costs by Blue Cross NC and you, the member, for covered services after you’ve met your benefit period deductible. Coinsurance is usually shown as a percentage.

For example, if your coinsurance is 20%, that means you'll pay 20% of covered medical expenses after you've met your deductible (and Blue Cross NC will pay 80%) until you reach your out-of-pocket limit for the benefit period.

Once you reach the out-of-pocket limit, Blue Cross NC covers 100% of all covered services for the remainder of the benefit period.

Find your coinsurance percentage on the Benefits page in Blue Connect, on your member ID card or in the Summary of Benefits in your benefit booklet.

In short:

Coinsurance is your share of the cost of a covered medical service after you’ve met your deductible for your benefit period.

Allowed Amount

The maximum amount that Blue Cross NC determines is reasonable for covered services provided to a member. The allowed amount includes any Blue Cross NC payment to the provider, plus any deductible, coinsurance, or copayment. For in-network providers, the allowed amount is the amount the provider has agreed to accept as payment in full.

In short:

The Allowed Amount is the maximum payment Blue Cross NC will pay for a covered health care service. If a provider charges more than the allowed amount, you may have to pay the difference.

In-Network / Out-of-Network Providers

An in-network provider is a hospital, doctor, other medical practitioner or provider of medical services and supplies that contracted with Blue Cross NC for your insurance plan or participates in the BlueCard program. Ancillary providers outside North Carolina are considered in-network only if they contract directly with the Blue Cross and Blue Shield plan in the state where services are provided, even if they participate in the BlueCard® program.

An out-of-network provider is a provider who does not contract with Blue Cross NC and does not participate in the BlueCard program.

In short:

In-Network Providers are health care providers and facilities that contract with Blue Cross NC or participate in the BlueCard program. You may pay less if you see an in-network provider.

Out-of-Pocket Limit

The out-of-pocket limit is the dollar amount you pay for covered services in a benefit period before Blue Cross NC pays 100% for covered services. The out-of-pocket limit includes your deductible, coinsurance and copayments.

In short:

The maximum dollar amount you pay for covered services in a benefit period before Blue Cross NC pays 100% of covered services. It includes your deductible, coinsurance and copayments.


1 Learn more about this and other terms in the FAQs About Benefits or in your Blue Cross NC Benefits Booklet in Blue Connect. 2 See a detailed view on the Explanation of Benefits page in Blue Connect. 

Get In the Know

Stay up to date and get the latest information about the Affordable Care Act, tips for getting the most from your plan and changes in health care.

Learn more on our blog, The Point of Blue.

Frequently Asked Questions

Now that you know the common terms and have more information about health insurance, find answers to more questions you may have.

Get information about:

  • ID Cards
  • Billing and payment
  • Claims
  • How to apply
  • Approvals and referrals
  • General coverage, and more.

Read FAQs

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