MEDICARE BASICS
GLOSSARY OF TERMS
Annual Enrollment Period (AEP): October 15 – December 7
timeframe during which you can add, drop, or change Medicare Advantage and prescription drug plans
If you drop your Medicare Advantage plan and go back to Original Medicare, you can apply for a Medicare supplement plan. However, restrictions and/or underwriting for current health status may apply if you are outside of Open Enrollment or Guaranteed Issue Periods. While there are some exceptions, this is generally the only time during the calendar year in which you may opt for different coverage.
Annual Notice of Changes (ANOC)
explains any changes in plan benefits, services, and costs for the next calendar year; the information also provides instructions and important deadlines for changing plans and other helpful information.
The Centers for Medicare & Medicaid Services (CMS) mandates that health plans notify enrolled members by mail information about yearly plan benefit changes.
Beneficiary
A person eligible for health insurance through the Medicare or Medicaid program.
Benefit Period
the way Medicare measures your use of hospital and skilled nursing facility (SNF) services
A benefit period begins the day you are admitted as an inpatient at a hospital or SNF. It ends when you haven’t received any inpatient hospital care or skilled care in a SNF for 60 days in a row. A new benefit period begins if you go into a hospital or SNF after one benefit period has ended. You must pay the Part A deductible for each benefit period. There is no limit to the number of benefit periods.
Benefits
the care, items, and services that a health plan covers
Catastrophic Illness
a very serious and costly health condition that could be life-threatening or cause life-long disability
The cost of medical services for this type of condition could cause you financial hardship if you are not properly insured.
Centers for Medicare & Medicaid Services (CMS)
a federal agency within the United States Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the State Children’s Health Insurance Program (SCHIP), and health insurance portability standards.
Co-insurance
cost sharing where costs are split on a percentage basis
For example, Medicare Part B pays about 80% of Part B expenses and you pick up the rest.
Co-payment
cost sharing where you pay a pre-set, fixed amount for each service (sometimes called “co-pay”)
Cost Sharing
your share for a medical service or supply, including co-payments, co-insurance or deductibles
Covered Drugs
all of the prescription drugs covered by our plan
Covered Services
all of the health care services and supplies that are covered by our plan
Deductible
the pre-set, fixed amount you have to pay before Medicare begins to pay for Medicare-approved expenses
Dual Eligible Individual
a person who qualifies for both Medicare and Medicaid coverage
Effective Date
the date your coverage begins
Emergency Care
covered services that are: (1) rendered by a provider qualified to furnish emergency services; and (2) needed to evaluate or stabilize an emergency medical condition
End-Stage Renal Disease (ESRD)
permanent kidney failure requiring dialysis or a kidney transplant
Evidence of Coverage (EOC)
a document that details and explains a health plan’s benefits and services
Medicare Advantage and prescription drug plans are required to post copies of the EOC to their websites by October 15 each year and provide printed copies to members upon request.
Formulary or “Drug List”
a list of prescription drugs covered by the plan
The drugs on this list are selected by the plan with the help of doctors and pharmacists. The list includes both brand name and generic drugs.
General Enrollment Period (GEP): January 1 – March 31
another chance to enroll in Medicare Parts A and B if you didn’t enroll in Medicare during an Initial or Special Enrollment Period
When you enroll in coverage during this time, it takes effect on the following July 1st.
Generic Drug
a prescription drug that is approved by the Food and Drug Administration (FDA) as having the same active ingredient(s) as the brand name drug. Generally, a “generic” drug works the same as a brand name drug and usually costs less.
Guaranteed Renewable
assurance that your Medicare supplement plans cannot be terminated by the insurance company unless you make false statements (material misrepresentation) to the insurance company, or don’t pay your premiums on time
Rates subject to change. Any change will apply to all members of same class insured under your plan residing in your state.
Initial Enrollment Period (IEP)
7-month period during which you become eligible for Medicare
IEP begins three months before the month of your 65th birthday and ends three months after that month.
In-Network Provider
a healthcare provider – such as: a physician, hospital, other medical facility, and/or pharmacy – that is contracted with the health plan to provide services at a set rate
Providers on the plan’s network listings are also called participating providers.
Late Enrollment Penalty
an amount added to your monthly premium for Medicare drug coverage if you go without creditable coverage (coverage that is expected to pay, on average, at least as much as standard Medicare prescription drug coverage) for a continuous period of 63 days or more after you become eligible for Medicare
You pay this higher amount as long as you have a Medicare drug plan. There are some exceptions. For example, if you receive Extra Help from Medicare to pay your prescription drug plan costs, you do not pay a late enrollment penalty.
Limitations
a specific time-period or number of visits a health plan covers, or items or services a health plan doesn’t cover in some circumstances
Maximum Out-of-Pocket Amount
limit on the amount you pay during a calendar year
Once you have paid out-of-pocket for covered Part A and Part B services, you will pay nothing for your covered in-network Part A and Part B services for the rest of the calendar year. Amounts you pay for your Medicare Part A and Part B premiums, and prescription drugs, do not count toward the maximum out-of-pocket amount.
Medicaid
joint federal and state program that helps with medical costs for some people with limited income and resources
Medicaid programs vary by state, but most health care costs are covered if you qualify for both Medicare and Medicaid.
Medical Underwriting (if your state allows it)
process that an insurance company uses to decide, based on your medical history, whether or not to accept your application for insurance; whether or not to add a waiting period for pre-existing conditions; and how much to charge you for that insurance
Medicare
health insurance program for people age 65 and over, people under 65 with certain disabilities, and people of any age with End-Stage Renal Disease (ESRD) or Lou Gehrig’s disease
Medicare Advantage
refer to “Part C”
Medicare Advantage Open Enrollment Period (OEP): January 1 – March 31
time when individuals enrolled in an MA plan, including newly MA-eligible individuals, can make a one-time election to go to another MA plan or Original Medicare (Parts A and B)
Individuals using the OEP to make a change may make a coordinating change to add or drop Part D coverage.
Medicare Effective Date
when Part A and Part B benefits active
Medicare-Approved Amount
the payment amount that Medicare pays to a physician or supplier for a service or supply
This amount may be less than the actual amount charged by a physician or supplier. If a provider does not accept Medicare’s approved payment amount as full payment and you are not enrolled in a Medicare Advantage plan or do not follow the plan’s payment rules, you may have to pay the difference between what Medicare allows or the plan pays and what the provider charges.
Medicare Supplement Insurance Plans
insurance that you buy from a private insurance company that pays for some of the cost sharing with Medicare Parts A and B coverage
Medicare supplement insurance is available in up to 10 standardized insurance plans. Each plan is named with a letter of the alphabet. In Massachusetts, Minnesota and Wisconsin, there are different standardized plan options available.
Medicare Supplement (Medigap) Open Enrollment Period
the six-month period that starts with the first day of the month in which you are both age 65 or older and enrolled in Medicare Part B
If your initial enrollment in Part B is before age 65, you have a second six-month Open Enrollment period beginning the month you turn 65. There may be other situations in which your acceptance may be guaranteed. Enrolling during this period gives you a guaranteed right to buy any Medicare supplement plan sold in your state, regardless of any medical conditions you may have. If you choose to apply outside of your Medicare Supplement Open Enrollment period or a Guaranteed Issue period, you may be underwritten and not accepted into the plan. (This does not apply to residents of Connecticut and New York where guaranteed issue is ongoing and Medicare supplement plans are guaranteed available.)
Medigap
See “Medicare Supplement Insurance Plans”
Modified Adjusted Gross Income
your adjusted gross income plus any tax-exempt Social Security, interest, or foreign income you have
Outpatient Care
medical or surgical care that does not include an overnight hospital stay
Part A (Hospital Insurance)
the part of Medicare that provides help with the cost of inpatient hospital stays, skilled nursing services following a hospital stay, hospice, respite care and some home health services
Part B (Medical Insurance)
the part of Medicare that provides help with the cost of medically necessary services like doctor services, outpatient care and other medical services Part A doesn’t cover
Part C (Medicare Advantage Plan)
plans offered by Medicare-approved private insurance companies that provide Medicare Part A and Part B services
Part C plans are also called “Medicare Advantage” plans.
Part D (Prescription Drug Coverage)
plans from Medicare-approved private insurance companies that offer help with the cost of prescription drugs
Premium
a fixed amount you have to pay for an insurance plan, usually as a monthly payment
Premium Penalty
A penalty fee that may apply to Medicare Parts A and B if you don’t enroll when you’re first eligible, unless you qualify for a Special Enrollment Period
Prior Authorization
approval in advance to get services or certain drugs that may or may not be on our formulary
Some in-network medical services are covered only if your doctor or other network provider gets “prior authorization” from our plan. Some drugs are covered only if your doctor or other network provider gets “prior authorization.” Covered drugs that need prior authorization are marked in the formulary.
Provider
A person or organization that provides medical services and products, such as a doctor, hospital, pharmacy, laboratory or outpatient clinic
Referral
a written request from your primary care physician (PCP) for you to see a specialist or to receive certain services
Service Area
the specific county/ZIP code/state where a member actually resides
The service area is where you must live for a plan to accept you as its member.
Special Enrollment Period (SEP)
certain situations allowing you to enroll in Medicare, or make changes to your Medicare coverage, without penalty
One Special Enrollment Period applies if you did not enroll in Medicare during your Initial Enrollment Period because you (or your spouse) was still employed and you were covered under a group health insurance plan. In this instance, you will have eight months following the time you (or your employed spouse) stop working or your health coverage ends, whichever comes first. However, you may enroll in Medicare Part B sooner to avoid a break in coverage.
Standardized
the basic benefits that make up each Medicare supplement plan
The plans, categorized by letters such as F and N, are standardized from company to company.
Summary of Benefits (SBs)
a brief description or outline of your coverage, including the amounts or percentage you pay for certain services, and the services for which coverage is limited or excluded
Urgently Needed Care
care you receive for a sudden illness or injury that, while not life threatening, requires immediate medical attention
Your primary care physician (PCP) generally should provide this care, or you may get the care at an urgent care center, unless you are out of the service area. If out of the service area, you may receive urgently needed care anywhere. See your plan benefits for information about any out-of-pocket costs you may incur if you see a physician out of your service area.
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