Unallocated Benefit
What Does Unallocated Benefit Mean?
An unallocated benefit is a benefit not specifically listed on a health insurance policy, but which the policy may cover up to a certain amount. Unallocated benefits typically refer to coverage for miscellaneous costs incurred during a hospital stay. These costs are grouped under the term “unallocated benefits” to avoid the need to list each one individually on the policy.
Insuranceopedia Explains Unallocated Benefit
When a health insurance policyholder is hospitalized, numerous expenses can accumulate, such as the cost of an IV, medications, or lab tests. These are examples of items often covered under unallocated benefits.
Grouping these various costs together saves the insurance company significant time and resources, as it eliminates the need to assess each expense individually. Instead, the insurer reimburses the policyholder for a predetermined amount of the total cost of these miscellaneous expenses.
Unallocated benefits are just one piece of how health insurance costs are split between you and your insurer. To understand how the rest of your out-of-pocket spending works, see this breakdown of premiums, deductibles, co-pays, and coinsurance. If you’re shopping for a new policy, you can also compare health insurance quotes to see how different plans handle these expenses.
