Whether you are already a Medicare beneficiary, or about to become one, you’re likely to run into some new language concerning your healthcare coverage. What’s the difference between a copayment and coinsurance? Is Medigap the same thing as Medicare Supplement insurance? As a federal health insurance program, Medicare has a name for everything—and that’s a good thing. But, the more familiar you are with the terminology, the easier it will be to navigate your health insurance options. Here are a few of the most commonly used terms associated with Medicare. Take a few minutes to read through the list, and keep it handy. When it’s time to make informed decisions about your Medicare coverage, you’ll be in a better position to make smart choices with coverage that fits your needs best.
Coinsurance The amount you pay for medical services after you pay your deductible. Coinsurance is typically a percentage. For example, you may have coinsurance equal to 20 percent.
Copayment The amount you pay for medical services or supplies, like a doctor’s visit, hospital outpatient visit, or a prescription drug. A co-payment is typically a set amount, not a percentage. For example, you might pay $10 or $20 for a doctor’s visit or a prescription drug.
Costs sharing The amount paid for medical services or supplies, like a doctor’s visit, hospital outpatient visit, or prescription drug. This amount can include copayments, coinsurance, and/or deductibles.
Excess charge If you have Original Medicare, and the amount a doctor or other health care provider is legally permitted to charge is higher than the Medicare-approved amount, the difference is called the excess charge.
Extra Help A program designed to help those with limited income pay for Medicare prescription drug costs, like premiums, deductibles, and coinsurance.
Formulary The list of prescription drugs covered by a prescription drug plan. Also called a drug list.
Guaranteed issue rights Rights you have when insurance companies are required by law to sell or offer you a Medigap policy. With guaranteed issue rights, an insurance company cannot deny you a policy or charge you more for a policy because of a past or present health problem.
Guaranteed renewable policy An insurance policy that can’t be terminated by the insurance company unless you make untrue statements to the insurance company, commit fraud, or don’t pay your premiums. All policies issued since 1992 are guaranteed renewable.
High-deductible Medicare Supplement Plan A type of policy that has a high deductible but a lower premium. You pay the deductible before the policy pays anything. The deductible amount can change each year.
In-network Doctors, hospitals, pharmacies, and other healthcare providers have agreed to provide members of a certain insurance plan services and supplies at a discounted price. With some plans, you are only covered if you receive care from in-network doctors, hospitals, and pharmacies.
Medicare Advantage Plan (Part C) A Medicare health plan offered by private companies that contract with Medicare to provide Part A and Part B benefits. Most Medicare Advantage Plans offer prescription drug coverage.
Medicare Advantage Prescription Drug (MA-PD) Plan A Medicare Advantage plan that offers Medicare prescription drug coverage (Part D), Part A, and Part B benefits in one plan.
Medicare Prescription Drug Plan (Part D) Part D adds prescription drug coverage to Original Medicare. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare Prescription Drug Plans.
Medicare Supplement Open Enrollment Period A one-time-only, 6-month period when federal law allows you to buy any policy you want that’s sold in your state. It starts in the first month that you’re covered under Part B and you’re age 65 or older. During this period, you can’t be denied a policy or charged more due to past or present health problems. Some states may have additional open enrollment rights under state law.
Network The facilities, providers, and suppliers your health insurer or plan have contracted with to provide health care services.
Out-of-pocket costs Health or prescription drug costs that you must pay on your own because they are not covered by Medicare or other insurance.
Penalty An amount added to your monthly premium for Part B or a Medicare drug plan (Part D) if you don’t join when you’re first eligible. You pay this higher amount as long as you have Medicare. There are some exceptions.
Referral A written order from your primary care doctor for you to see a specialist or to get certain medical services. In many Health Maintenance Organizations (HMOs), you need to get a referral before you can get medical care from anyone except your primary care doctor. If you don’t get a referral first, the plan may not pay for the services.
Tiers are Groups of drugs that have a different cost for each group. Generally, a drug in a lower tier will cost you less than a drug in a higher tier.
References:
https://www.medicare.gov/glossary/c.html
MUC52-2017-BCBS
