Allowed amount
Updated September 30, 2026
Definition
The most your health plan will pay for a covered service. It's often lower than the provider's full price, and your share is figured from it.
The allowed amount is the most your health plan will pay for a covered service. Plans may also call it the eligible expense, payment allowance, or negotiated rate. It's often lower than the price the provider first charges.
You'll see it on your explanation of benefits (EOB), often in a column called "allowed" or "allowed charges." Your deductible, copay, and coinsurance are figured from this number, not from the full price.
For example, say a provider charges $300 for a visit and your plan allows $180. You've met your deductible and owe 20% coinsurance, so your share is $36 and your plan pays $144. An in-network provider writes off the other $120. An out-of-network provider may bill you for it, unless federal or state rules protect you. If your bill asks for more than your EOB, see why your medical bill is higher than your EOB.
Related terms
Guides that use this term
- GuideMedical bill vs. EOB: how to compare them line by lineYour bill and your EOB should tell the same story. Here's how to compare them in 20 minutes, with a worked example and what to do if they don't match.
- GuideWhy is my medical bill higher than my EOB?Your bill asks for more than your EOB says you owe? See the usual reasons, a worked example, and the steps to get a corrected bill before you pay.
Sources
- Allowed amount (glossary), HealthCare.gov. Accessed September 30, 2026.
- Health insurance terms you should know, Centers for Medicare & Medicaid Services. Accessed September 30, 2026.
This is general information, not legal or medical advice. Rules can depend on your plan and your state. Romi Care isn't an insurer, law firm, collection agency, or government program.