Allowed Amount
The maximum amount a health plan will pay for a covered health care service.
Detailed Explanation
This is the negotiated rate between your insurance company and healthcare providers in their network. If a provider charges more than the allowed amount, you might be responsible for the difference (unless it's balance billing, which is sometimes prohibited).
Practical Example
Let's say your doctor charges $150 for an office visit, but your insurance company's allowed amount is $100. You will likely only pay your co-pay or deductible based on the $100 allowed amount, and the doctor will usually write off the remaining $50.
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