Medical Benefits Terms

Allowed amount: The amount the plan has negotiated with network providers to accept as full payment. For example, if a service is covered at 90%, you pay only 10% of the allowed benefit, up to your out-of-pocket maximum. Out-of-network providers are not obligated to accept the allowed benefit as payment in full and may charge you more. This is called balance billing.

Balance billing: When an out-of-network provider bills you for the difference between the provider’s charge and the allowed amount. For example, if the provider’s charge is $200 and the allowed amount is $155, $45 won’t be considered when your claim is processed and the provider may bill you for it. An in-network provider or facility cannot balance bill you for covered services. This does not get applied to your deductible or out of pocket maximum.

Coinsurance: The percentage of the cost you pay for certain covered services. The coinsurance percentage is lower for services received from in-network providers than for the same services from out-of-network providers.

Copayment: This is a fixed dollar amount you pay at the time service is rendered. This money goes directly to the health care provider.

Deductible: The amount you pay each year before your medical plan begins providing benefits for care.

Out-of-pocket maximum: This is the most you will pay each year in deductible, copay and coinsurance charges. When the total amount you have paid in a year reaches the out-of-pocket limit, the plan will pay 100% of your copays and coinsurance for the remainder of the plan year (through Dec. 31).

Out-of-Network providers: These are professional providers and facilities who do not have a contract with Cigna. Their services are subject to applicable copays, deductibles and coinsurance. These providers may balance bill you for charges above the allowed benefit amount.

Preauthorization: This is a decision by your insurer or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary. This is sometimes called prior authorization, prior approval or precertification.