What is an Allowed Amount?

An allowed amount is the maximum payment your insurance company will approve for a covered healthcare service. This amount is typically negotiated between insurance companies and healthcare providers, and it may be significantly less than the provider's standard charge. Your cost-sharing responsibilities (deductibles, coinsurance, and copayments) are calculated based on this allowed amount, not the provider's billed charge.

Why allowed amounts matter

• Determines your costs: Your coinsurance and deductible payments are calculated as percentages of the allowed amount
• Affects provider choice: In-network providers agree to accept the allowed amount as full payment, while out-of-network providers may bill you for the difference
• Impacts total healthcare spending: Understanding allowed amounts helps you anticipate your actual costs for medical services

How Solace can help

A Solace advocate can help you understand allowed amounts for specific procedures, compare costs between providers, and navigate balance billing issues when using out-of-network providers. Advocates can also assist in negotiating with providers who charge above the allowed amount.