Medicare Part D has different cost-sharing tiers for drugs. Tier 1 has the lowest copayment and covers most generics, Tiers 2 and 3 cover brand-name drugs and have higher copayments, and tier 4 is a specialty tier that covers very high-cost drugs.
Low-income subsidy (LIS) assistance for Part D, also called “Extra Help,” is a program to help people with lower incomes pay for Part D drug costs like premiums, deductibles, and coinsurance.
Inpatient care describes any service that requires hospitalization.
Outpatient care (also called Ambulatory care) describes any service that does not require hospitalization.
Some Medicare plans require referrals from a Primary Care Doctor prior to providing specific covered services.
Some Medicare plans require authorization from Medicare prior to providing specific covered services. This authorization is about cost-savings and not whether or not the plan offers the care.
A Dual-Eligible plan is a type of Special Needs Plan (SNP) for beneficiaries who are eligible for both Medicare and Medicaid.
Most Medicare drug plans have a Coverage Gap (or “donut hole”). This is a gap in drug coverage between the Initial Coverage Period and Catastrophic Coverage Period.
After you meet your Part D drug deductible on Part D drug plans you enter the initial coverage period. During this phase your plan will start to pay some of the costs by offering copays and coinsurance on drugs.
There are three types of age ratings with Medigap. Attained-age-rated, issue-age-rated, and age-community-rated.
A demonstration / pilot program, sometimes labeled “DEMO,” is offered to a limited population for a limited time to test improvements in Medicare coverage, payment, and quality of care.
Coordinated-Care plans (CCPs) are plans with a network of healthcare providers that is pre-approved by the Centers for Medicare and Medicaid Services (CMS). These include HMOs, PPOs, HMOPOSs, and SNPs.
Private Fee-for-Service (PFFS) plans may or may not offer a specific network, these plans generally however work like Original Medicare where you go to any Medicare-approved healthcare provider that agrees to the plan’s payment terms.
Medical Savings Account (MSA) plans combine a high-deductible health plan with a health savings account.
HMO Point of Service (HMOPOS) plans are HMO plans that may allow you to get some services out-of-network for a higher cost.
Preferred Provider Organization (PPO) plans offer networks of healthcare providers that are deemed “preferred providers.”
Health Maintenance Organization (HMO) plans typically offer lower prices by limiting your care to healthcare providers within the HMO’s network in non-emergency situations and requiring referrals from a primary care doctor to see other doctors or specialists.
Maximum Out-of-Pocket limit (MOOP) is the maximum amount you can spend in a year on in-network copays and coinsurance for covered or eligible medical and hospital services covered by Original Medicare (Part A and Part B).
Special Needs Plans (SNP) are a type of Medicare Advantage Plan designed for those with specific severe or disabling chronic conditions.
The gap in Part D drug plans between the initial coverage limit and the time when you have paid enough to become eligible for catastrophic coverage in which you pay a certain percentage of prescription drug costs as set by Medicare.
Healthcare providers (doctors, providers, suppliers, etc) that work with Medicare agree to accept the Medicare-approved amount as full payment for covered services (this is called “assignment”). Using these providers won’t result in an excess charge.
In most states, healthcare providers who don’t participate in Medicare may charge up to 15% above the Medicare-approved amount of a service. This amount is billed directly to the patient as a Medicare Part B Excess Charge.
Medicare is a federal health insurance program established in 1965. Medicare provides coverage for people who are 65 or older, people with disabilities, and people with End-Stage Renal Disease (ESRD).
End-Stage Renal Disease (ESRD) occurs when chronic kidney disease reaches an end state. With end-stage renal disease, you need dialysis or a kidney transplant to stay alive. People with ERSD qualify for Medicare regardless of age.
Cost-sharing describes health care costs that are shared between you and your insurer.
Your Out-of-Pocket Maximum or Limit (Also called Maximum Out-Of-Pocket or MOOP) is the maximum dollar amount you can pay in out-of-pocket costs each calendar year before all in-network services are covered by your insurer.
Your deductible is the amount you must pay out-of-pocket before your health plan starts paying coinsurance.
Coinsurance is the percentage split between what you owe and what your insurer owes for a service.
Your copay is the dollar amount you pay when you access a service subject to a copay. Services are generally subject to either a copay or coinsurance, but not both.
Your out-of-pocket costs are the costs you incur beyond your premium. You may be subject to out-of-pocket costs when you access a service or fill a prescription. Out-of-pocket costs include copays, coinsurance, deductible, and an out-of-pocket maximum.
Your premium is the amount you pay every month to keep your coverage.
With Medicare, the term “network” describes the network of doctors and healthcare providers offered by a Medicare plan. The two main network types are HMO and PPO.
With Medicare, a benefit period begins the day you’re admitted to the hospital and ends when you’ve been out of the hospital for 60 days in a row.
Medicare Part A covers inpatient hospital care for up to 90 days each benefit period. Lifetime reserve days are an additional 60 days of coverage that can only be used once.
Initial Coverage Limit (ICL) is a dollar amount that you have to spend on covered drugs on a Part D plan before you reach a coverage gap. Thus, ICL is essentially a type of deductible for Part D plans.
Creditable health is health coverage that lets you delay or drop Medicare Part B without penalty. Likewise, creditable prescription drug coverage is drug coverage that lets you delay or drop part D without penalty.
Some parts of Medicare may be subject to a late enrollment penalty. The penalty amount is added to your premium for missing your initial sign up window. This applies to Part A if you would owe a premium, Part B, and Part D.
A drug formulary, also called a drug list, is a list of drugs covered by a prescription drug plan or health insurance plan with drug coverage.
Medigap (also called Medigap Supplement) is a highly regulated and standardized supplemental insurance that pairs with Original Medicare.