Allowed Amount
Insurance Glossary
The maximum a health plan will pay for a covered service, set by contract with in-network providers and by plan rules for everyone else. Patient cost sharing is calculated from this figure rather than from the amount the provider bills, so a deductible or a coinsurance percentage applies to the allowed amount. It is also called the eligible expense, the payment allowance or the negotiated rate, and the gap between it and a billed charge is where balance billing arises.
This content is for general informational purposes only and is not insurance, legal, or financial advice. Coverage, exclusions, eligibility, and pricing vary by insurer, by policy, and by state, and only the policy documents control what is covered. Always confirm the details of any coverage with a licensed insurance agent or the issuing carrier before you buy.