Medicare Terms and Implications for 2023 Huntington Beach, CA

Medicare can be confusing, and when it comes to understanding the terms and the acronyms (letters to replace the words) this blog covers the most popular terms. Welch Insurance also has a blog post on the Medicare Enrollment Periods so we will not cover it in this blog post. To learn more about Medicare join us at a Medicare Education Event. For an on-line quote on Medicare Insurance Plans.

Annual Notice of Changes (ANOC): This is the information about your Medicare Advantage plan changes for the upcoming year.

Coinsurance: The percentage you are responsible to pay for medical and drug costs.

Copayment: A fixed dollar amount you are responsible to pay.

Creditable drug coverage: This is coverage from a company drug plan or another plan that is equal to or better than Medicare Part D coverage.

Deductible: The dollar amount you pay before your plan benefits pay.

Drug formulary: The list of drugs that the plan covers. They are normally in tiers which determine the cost.

Evidence of coverage: The document that contains information about what the plan you have will cover.

Health Maintenance Organization (HMO): A network of providers you normally must use for your plan’s benefits.

Maximum Out of Pocket: The maximum dollar amount you could pay annually for medical expenses according to the plan you are in.

Medicaid or Medical: A federal and state-funded program to assist people below certain income levels.

Medicare Part A: Helps cover costs of hospitalization and is administered by the federal government.

Medicare Part B: Helps cover costs of outpatient services such as doctors and is administered by the federal.

government.

Medicare Advantage Plan (Part C): Part C replaces the benefits of Medicare Part A, Part B, and usually Part D. It is offered by private insurance companies.

Medicare Part D: Helps cover the costs of drugs and is sold by independent insurance companies.

Medicare Part D drug coverage gap; also known as the “donut hole”. After you and the company that covers your prescription drugs on your Part D drug plan, pay a certain amount (in 2023 it is $4,660), you will pay no more than 25% of drug costs.

Medicare Supplement Insurance (Medigap Insurance): Helps pay your cost of Medicare Part A and Part B.  offered by independent insurance companies.

Network: The Network is made up of a group of providers such as doctors, hospitals, and other providers. These providers agree to the plan’s payment schedule and terms.

Plan Type: There are different plans offered within the same independent insurance carrier for Medicare. There can be PPO, HMO, or other plan types and have sub-plans within the same plan.

Preferred Provider Organization (PPO): You can typically choose a doctor or provider that is in the network at a lower cost, but can go out of network and pay at a higher cost.

Premium: This is what you pay for the benefits of the plan.

Primary Care Physician (PCP): This is the doctor you must see for medical treatment and referrals for specialists in an HMO Medicare Advantage Plan.

Prior Authorization: You may need prior authorization from your Medicare Part D drug plan before you can have a prescription filled.

Provider: Any doctor, nurse, or medical professional that can provide medical services.

Original Medicare: It is Medicare Part A and Part B.

Referral: A written referral from your Primary Care Physician (PCP) is necessary to see a specialist if you’re in a Medicare HMO Advantage Plan.

Respite Care: Temporary care from a caregiver that is family or a friend.

Secondary Payer: This could be your Medicare, Medicare Supplement Plan, or Medicaid.

Service Area: The geographic area of the Medicare Plan services. You must live within the plan’s service area to apply. If you move out of the service area you must notify the carrier you are with.

Step Therapy: The rule that can be used by your Part D drug coverage to have you use a lower-cost drug for a condition before allowing a higher-cost drug.

Tiers: This allows a Part D drug company to group drugs together. Usually, the lower the tier, the lower the cost of the drug.

Urgent Care: This type of care is not life-threatening, but it would not be safe to wait until you can see your PCP.

Conclusion:

Medicare terms can be very confusing including the different Parts of Medicare. However, it is important to understand Medicare Part A, Part B, Part C, Part D, and Medicare Supplement plans. You can also visit Medicare.gov/glossary for more information. It is always best to keep updated for changes to Medicare Insurance Plans. Visit our Medicare Overview Page.