Understanding the Language of Medicare

I’ve said this before and it bears repeating; Medicare is not one-size-fits-all. What works for your healthcare coverage should be based on your individual health concerns and budget.


Medicare is complicated and knowledge is power. I’ve had clients liken it to learning a strange new language. That said, let’s take a few minutes to understand Medicare terms and be a more informed consumer. After all, the Medicare Annual Election Period (AEP), October 15th - December 7th feels like it’s just around the corner.


Premium: the amount of money that you’ll be charged every month for your Medicare plan; whether it’s a Medigap plan that pays secondary to Medicare or an all-in-one Medicare Advantage plan. Depending on your income, most people pay a premium for your Part B (doctors and outpatient) coverage.


$0 (Zero) Premium Plans; Why don’t they just call it “free”? That’s because it’s not “free”. You have to have Medicare A & B coverage to have this type of plan and most people pay a Part B premium monthly (unless you’re getting assistance from the government). $0 (Zero) premium just means that the health insurance company doesn’t charge you an additional monthly amount for your health plan.


Deductible; This is how much you’ll have to spend before your insurance plan starts to pay for services. Note: Many Medicare Advantage plans have no deductibles for medical services. Your Prescription Drug Plan may have a separate deductible.

M.O.O.P or Max Out of Pocket; Often confused with the annual deductible but there’s a big difference. Your M.O.O.P. amount is the most that you can be charged in copays and coinsurance during a calendar year for your Medicare-covered services. Lower is always better when it comes to this. Once your copays hit this annual threshold, you will pay no more copays for the remainder of the year for your Medicare-covered services. This does not include what you spend on Part D drug cost-shares (deductibles, coinsurance, and copayments). If your Advantage plan is a PPO that offers in and out-of-network coverage you can have 2 differing maximum out-of-pocket amounts.


Formulary; This is just a fancy word for the health plan’s covered prescription drug list.

Drug Tiers; Prescription drug plans use tiers to divide drugs by copay cost. Typically, the higher the tier number the more expensive the drug.


Beneficiary; It’s not uncommon to the of a beneficiary as being someone else (as in Sheila is the beneficiary of her family’s will) but in Medicare terms, you are the beneficiary.


SNF (often pronounced “sniff”); Skilled Nursing Facility are short-term rehab centers commonly used as a bridge between the hospital and home.


AEP/Annual Election Period; The time of year that all Medicare recipients can make changes to their plans. It is always between October 15th and December 7th. You’re entitled to make as many changes to your plan as you’d like with the plan that you have.


OEP/Open Enrollment Period; People tend to use this term interchangeable with the annual election period but they really are 2 different things. OEP runs from January 1st through March 31st annually. During this time people on Medicare Advantage plans are allowed to make a one-time change to their plan.


DME/Durable Medical Equipment; I refer to this as stuff that’s going to wear out or break down. Examples include things like oxygen, wheelchairs, and walkers.


MAPD/Medicare Advantage Prescription Drug Plan; Part C of Medicare, this type of plan combines your Part A, B, and D coverage into an all-in-one plan.


MA-Only; Medicare Advantage without a Part D prescription drug component.


PDP/Prescription Drug Plan; Part D of Medicare, think of this as insurance for your prescription drugs.


For a complete Medicare glossary go to; https://www.medicare.gov/glossary/m


Liz McPherson is an independent insurance agent that only sells Medicare plans and owns the Colorado Springs Medicare Resource Center. She lives in Woodland Park, Colorado with her husband, 4 dogs, 3 cats, and a horse named “Dottie West”. She’s worked in the “Medicare world” since 2005 in both health plan operations and sales management. A proud graduate of Slippery Rock University (BA in Political Science) and University of Phoenix (MBA in Healthcare Management) she wears her nickname of “Medicare Nerd” as a badge of honor.


You can reach Liz at:

MedicareResourceCenterCOS.com

Liz@COSMRC.com

O: (719) 358-6696

C: (719) 243-0965 (text friendly)

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