How US health insurance actually pays a bill
Last reviewed · Educational use only
Every claim runs through the same few steps: the price is cut to an allowed amount, the patient's deductible and coinsurance are applied, and a yearly cap stops the patient's share. What changes between plans is the network, the numbers, and who else is on the policy.
Learn by doing: build a plan and run a bill through it
In about two minutes you'll set up a practice health plan, send a bill through it, and watch every step the insurer takes. Then you'll run the same bill out of network and compare the two.
Everything here is made up for practice. Nothing you pick is saved or sent anywhere.
| In network | Out of network | |
|---|---|---|
| Deductible | ? | … |
| Coinsurance | ? | … |
| Out-of-pocket max | ? | … |
One $1,000 bill, step by step
A patient on a PPO sees an in-network specialist. The patient has $250 left on the deductible and 20% coinsurance.
If the same specialist were out of network, there would be no contracted rate. The plan would set its own allowed amount, apply a separate and usually higher deductible, and the provider could bill the patient for the difference between the charge and what the plan allows. The claim cost calculator runs both cases side by side.
Pick a starting point
New to insurance terms
Premium, deductible, copay, coinsurance, out-of-pocket maximum, and what counts toward each.
Cost-sharing basics →Choosing or explaining a plan
HMO, PPO, EPO, POS, HDHP, Medicare, Medicaid, Marketplace metal tiers, self-funded plans.
Plan types →In or out of network
Allowed amounts, balance billing, the No Surprises Act, gap exceptions and single case agreements.
Networks →Covering a family
Embedded and aggregate deductibles, family out-of-pocket limits, dependents to 26, which parent's plan pays first.
Individual vs family →Billing a claim
Sixteen steps from scheduling to zero balance, with the X12 transactions and forms used at each one.
Claim lifecycle →Reading a denial
Look up claim adjustment reason codes and group codes, and what to do about each.
Denial codes →Use the filter at the top to hide billing-office detail. Start with the EOB decoder if you are holding a statement from your insurer, or the patient playbook if you have a bill you think is wrong.
Set the filter to "Billing pros" to see office-side notes throughout. The verification checklist has a call script you can copy, and deadlines & appeals collects filing limits in one table.
How this guide works
- Everything runs in your browser. Numbers you type into the calculators are never sent anywhere and are not saved.
- Example values are made up. The plans, prices and claims in examples and tools are fictional and represent no actual policy offered today. Only the federal limits in the key figures table are real published amounts (2026 and 2027), and they change every year.
- Plan documents win. Every plan's Summary of Benefits and Coverage (SBC) and its full plan document control how that plan pays. This guide describes how plans usually work.
This guide is general education, not legal, tax, medical, or financial advice. Do not enter real patient names, member IDs or other identifying details into the tools; they do not need them.