Medicare Advantage Plan? Annual notice of change? Here’s what it all means.
There’s a lot to know about Medicare, including many terms associated with the insurance program that you’ll need to understand when signing up for and using your Medicare benefits. Here, a glossary of some of Medicare’s most common terms.
Medicare is the federal health insurance program for people ages 65 and older. It also covers people younger than 65 who have disabilities, plus those with end-stage renal disease, requiring dialysis or a kidney transplant, or amyotrophic lateral sclerosis (also known as ALS or Lou Gehrig’s disease).
Original Medicare is the insurance program managed by the federal government. This type of coverage generally includes Medicare Part A and Part B. Under Original Medicare, the government pays hospitals and doctors directly.
Medicare Part A
Medicare Part A is essentially hospital insurance. It covers different types of inpatient care, including inpatient hospital stays, care received in skilled nursing facilities, hospice care and some home health care.
Medicare Part B (Medical Insurance)
Medicare Part B covers services that are delivered on an outpatient basis, including doctors’ visits, laboratory and imaging tests, medical supplies and preventive services.
Medicare Advantage Plan (Part C)
Medicare Advantage plans, also called Medicare Part C, include coverage for both Medicare Parts A and B through a private health insurer that’s been approved by Medicare. These plans cover hospitalization, outpatient care and often prescription-drug coverage under one policy.
Medicare Prescription Drug Plan (Part D)
Part D plans are private insurance policies that add prescription drug coverage to Original Medicare, some Medicare Cost Plans, Medicare Private-Fee-for-Service Plans and Medicare Medical Savings Account Plans.
Medigap is supplemental insurance sold by private insurance companies to fill “gaps” in Original Medicare coverage. These policies help pay for copayments, deductibles and health care when traveling outside the U.S. that Original Medicare does not.
Medigap Open Enrollment Period
The open enrollment period for Medigap plans is a six-month window that starts the first month you become age 65 (or are older) and are covered by Medicare Part B. Coverage is guaranteed during this period. In addition, you cannot be charged more for coverage because of current or past health problems.
ADDITIONAL TERMS TO KNOW
Advance Coverage Decision
A notice you get from a Medicare Advantage Plan letting you know in advance whether it will cover a particular service.
Annual Enrollment Period
Each year between Oct. 15 and Dec. 7, you can change your Medicare Advantage or Part D prescription drug plans for the following year. You can also switch from Original Medicare to Medicare Advantage or from Medicare Advantage back to Original Medicare.
Annual Notice of Change
A notice your Medicare plan sends each fall to alert you to any changes in coverage, costs or service area your plan is making that will take effect in January.
A benefit period is the way Original Medicare measures your use of hospital and skilled nursing facility, or SNF, services. A benefit period starts the day you’re admitted as an inpatient in a hospital or SNF. It ends after 60 consecutive days without receiving care. Medicare’s inpatient hospital deductible is paid at the start of each benefit period. A new benefit period begins when you are admitted to a hospital or SNF after one benefit period has ended. There is no limit to the number of benefit periods.
The portion of covered medical services you are responsible for after meeting deductibles, usually paid as a percentage of the total cost.
Coordination of benefits
A way to determine which health plan pays a medical claim first when you’re covered by more than one insurance policy.
A set dollar amount you’re required to pay for medical services or supplies, such as $10 for a prescription or doctor’s visit.
Most Medicare Prescription Drug plans have a gap in coverage, which is also called the “donut hole.” It’s a temporary limit on what your drug plan will cover that begins after you and your plan have spent a certain amount on covered drugs. Once you reach the coverage gap, you qualify for savings on both brand-name and generic drugs.
Creditable prescription drug coverage
A health plan with prescription drug coverage that is likely to pay at least as much as Medicare’s standard prescription drug coverage is considered creditable. To avoid paying a penalty for signing up late for a Part D drug plan, you must have alternate insurance that is considered creditable when you become eligible for Medicare.
The amount you must pay for health care services before your Medicare plan begins to pay and help cover your costs.
A Medicare program to help people with limited income and resources pay for the premiums, deductibles and coinsurance associated with their Medicare prescription drug plan.
A list of prescription medications covered by your Part D prescription drug plan or another insurance policy with drug benefits, like Medicare Advantage Prescription Drug plan.
General Enrollment Period
People who don’t sign up for Medicare Part A and/or Part B when they are first eligible can do so during the General Enrollment Period. GEP runs each year between Jan. 1 and March 31.
Medicare Savings Program
A program that helps people with limited income and assets pay some or all of their Medicare premiums, deductibles and coinsurance.
Medicare Summary Notice
MSNs are notices you receive after your doctor or medical supply vendor submits a claim to Medicare for services you received. The Medicare Summary Notice explains what your health care provider or supplier billed Medicare, the Medicare-approved amount, how much Medicare paid and what you must pay.
Medicare drug plans contract with pharmacies that agree to provide members with services and supplies at a discounted price. Some Medicare plans will not cover your medicines unless you get them filled at a participating network pharmacy.
Preferred pharmacies are part of a Medicare drug plan’s network. Your out-of-pocket costs for prescription drugs may be lower if you get them filled at a preferred pharmacy.
Some prescription drug plans and Medicare Advantage Prescription Drug plans offer mail-order programs that allow you to fill a 90-day supply of your covered medications and have them delivered to your home.
Late Enrollment Penalty
An amount added to your monthly premium for Part B or Medicare prescription drug plan (Part D) if you don’t join when you’re first eligible. With few exceptions, you pay this higher amount as long as you have Medicare.
Medicare prescription drug plans require that you get approval before you fill your prescription for certain prescription drugs in order for them to be covered by the plan.
State Health Insurance Assistance Program
These state programs offer free local health insurance counseling for people with Medicare coverage and their families or caregivers. You can find your SHIP at shiptacenter.org or by calling 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.