Generally, eligibility for Medicare begins at age 65. Your initial enrollment period starts three months before you turn 65 and ends three months after the month you turn 65. When the time to enroll in Medicare is approaching, it is important to learn the language. These are 10 Medicare terms you should know.
Original Medicare: When you enroll in Medicare, you can choose Original Medicare for your health coverage. It is a two-part health plan that includes Part A (hospital insurance) and Part B (medical insurance). You must meet an annual deductible, after which Medicare pays a percentage of approved healthcare costs, and you pay the remainder. For most covered services, Medicare pays 80%, and you pay 20% in coinsurance. There is no cap on out-of-pocket expenses. You may use Original Medicare with any healthcare provider in the U.S. that accepts Medicare.
Medicare Advantage Plan: This is the alternative to Original Medicare, under Medicare Part C. Medicare Advantage Plans are offered by private insurance companies that contract with Medicare. They provide all of the Part A and Part B benefits, with certain exclusions, and may provide benefits over and beyond what Original Medicare provides. Most Medicare Advantage Plans offer prescription drug coverage, and they all have annual caps on out-of-pocket expenses. Many of these plans require no additional premiums to Medicare Part B.
Medicare Part D: This is the Medicare drug plan. It adds prescription drug coverage to Original Medicare. Part D plans are offered by private insurance companies and other private companies approved by Medicare. Many Medicare Advantage Plans offer prescription drug coverage under the same rules as Part D plans.
Medigap: This term refers to Medicare supplement insurance sold by private insurance companies. Medigap policies are designed to fill in the coverage gaps left by Original Medicare.
Open enrollment: Medicare’s open enrollment period is October 15 through December 7 every year. During this period, Medicare health and drug plans can make changes to their costs, coverage, and networks, and individuals enrolled in Medicare can change their health plans and prescription drug coverage.
HMO (Health Maintenance Organization): A Medicare HMO is a type of Medicare Advantage Plan. With most HMOs, plan members may only go to hospitals, doctors, and specialists within the plan’s network, except in emergencies. Also, most HMOs require you to get a referral from your primary care physician.
PPO (Preferred Provider Organization): A PPO is another type of Part C plan in which you can use doctors, hospitals, and providers outside of the plan’s network, but you pay less if you use healthcare providers within the network.
Formulary: A list of prescription drugs covered by a prescription drug or other plan.
Copayment: A fixed amount you may be required to pay for services or medications, after any deductible.
Coinsurance: Your percentage of the cost of a service, for example, 20%, after the deductible is met.
Our friendly agent can help you find a Medicare plan that is right for you.