Which term refers to the maximum amount that an insurance company will cover for a specific procedure?

The term "allowed amount" refers to the maximum amount that an insurance company will pay for a specific procedure or service covered under a health plan. This is an important concept in health insurance because it defines the limit of payment that the insurer will provide, regardless of the actual charge by the healthcare provider. When a procedure is billed, if the provider’s charge exceeds the allowed amount, the patient may be responsible for the difference unless otherwise specified in the insurance contract.

Understanding this term helps patients navigate their medical expenses and understand the financial implications of their insurance coverage, especially in relation to out-of-pocket costs, deductibles, and co-pays. Other terms like "insurance cap," "premium limit," and "maximum allowance" may refer to different aspects of insurance coverage but do not specifically denote the payment cap for individual procedures.