A quick list of just some Medicare Advantage terms you may come across, with simple explanations:
- Premium: How much you are required to pay monthly for a Medicare Advantage plan to keep it in effect. (Or whatever type health plan you have.)
- Copay: Flat amount you are required to pay for a provider visit (after your deductible is satisfied, if applicable). Example: $40.00
- Coinsurance: A percentage of the full amount that you are required to pay (after your deductible is satisfied, if applicable) Example: If the full bill is $100.00 and you have a 50% copay, you would be required to pay $50.00
- Deductible: The amount you are required to pay BEFORE your insurance would start to cover you. The annual deductible resets each year.
- Cost sharing: The amount you pay for medical services or prescription drugs. It can include your copayment, coinsurance and deductible.
- Extra Help: A federal program that helps pay for some of the out-of-pocket costs of Medicare prescription drug coverage. It’s also known as the Part D Low-Income Subsidy (LIS).
- Total drug cost: What both you and your plan pay for a covered prescription drug.
- Maximum Out Of Pocket (MOOP): This is the total amount you would have to pay before you would be 100% covered for covered items in your plan. This Maximum Out Of Pocket resets each year. Your premium doesn’t count toward your MOOP.
- Network pharmacy: A pharmacy that has a contract with your plan. Your plan may only cover your prescription drug if you fill it at a network pharmacy. (See Preferred Pharmacy below)
- Network provider: A health care provider (for example, a doctor, hospital or facility) that has a contract with your plan.
- Preferred Pharmacy: Preferred pharmacies (that may be in many Medicare Advantage plans or Stand Alone Prescription Drug Plans), have contracts with your plan for specific Preferred Pharmacies, whereas, if you get your drugs from a preferred pharmacy in your plan, you will generally pay less, versus getting them at just a standard pharmacy in the plan network, where you will generally pay more for the same drugs.
- Formulary: A list of all prescription drugs covered in a specific plan. If it is not in the plan is it not covered. (Sometimes your doctor can request a special formulary exception and it may (or may not) be approved).
- Star Ratings: Medicare Advantage Star Ratings are a system used to evaluate and compare the quality of Medicare Advantage plans and Part D prescription drug plans. Plans are rated on a scale from 1 to 5 stars based on various performance measures, including customer service, member experience, and quality of care, with 5 stars indicating the highest quality. These are government ratings of the Medicare Advantage plans and the Medicare Prescription Drug plans and are not rated by the insurance companies themselves.
- Evidence Of Coverage (EOC): The Evidence of Coverage (EOC) for Medicare Advantage plans is a document that outlines in detail the costs and benefits of your specific Medicare Advantage plan. It is important to review this document to ensure your plan meets your healthcare needs. (In my opinion, it is kind of like a thick owner’s manual for a new car, since it a very comprehensive document that can be 100 to 200 or more pages explaining exactly what is and what is not covered in your plan.)
- Annual Election Period (AEP): The Medicare Annual Election Period runs from October 15 to December 7 each year, during which beneficiaries can make changes to their Medicare health plans and Prescription Drug Plans for the following year, with changes taking place with an effective date of January 1st. (Some people may call it, the Annual “Enrollment" Period, which is the same thing in this scenario.)
- Special Election Period (SEP): A Medicare Special Election Period allows individuals to enroll in or change their Medicare plans outside of the usual enrollment periods due to specific life events, such as moving to a different service area or losing other health coverage, etc. There are many other events that would qualify as a Special Election Periods, but too numerous to list here. The duration and eligibility for these periods depend on the nature of the qualifying event. (Some people may call it the Special “Enrollment" Period, which is the same thing in this scenario.)
- Medicare Advantage Open Enrollment Period (OEP): The Medicare Advantage Open Enrollment Period runs from January 1 to March 31 each year, allowing individuals already enrolled in a Medicare Advantage plan to make limited changes, such as switching to another Medicare Advantage plan or returning to Original Medicare. Changes made during this period take effect the first of the month after the plan receives the request. This election period is only for those already enrolled in a Medicare “Advantage” plan.
- Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care, except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness. Most HMO plans require referrals to go to a specialist.
- Preferred Provider Organization (PPO): The name refers to its network of contracted PPO providers. With this type of plan, there are preferred providers who can offer care at the lowest out of pocket costs, if you go to an in-network provider. However, you are allowed to go to out of network providers, but it will cost you a lot more! PPO generally do not require a referral to go to a specialist.
- In-Network: In-network refers to a health care provider that has a contract with your health plan to provide health care services to its plan members at a pre-negotiated rate. You pay a lower cost sharing when you receive services from an in-network doctor. A network can be made up of doctors, hospitals, facilities, and other health care providers that have agreed to offer negotiated rates for services to insureds of certain medical insurance plans.
- Out of Network: Medicare Advantage plans typically have a network of doctors, providers, and hospitals. If you go out of their network, you normally have to pay more and possibly may even have specific conditions with a PPO plan. However with an HMO plan, if you go out of network, you generally have to the full cost of services out of pocket, unless it is a true emergency or if verbiage is specifically written in your plan allowing you to do so.
- Tier Levels: Medicare Advantage plans often use tier levels to categorize the prescription drugs in their formulary (a complete list of drugs covered in their plan). Tier levels typically ranging from Tier 1 (lowest cost, usually generic drugs) to Tier 5 (highest cost, often specialty drugs). The specific tiers and associated costs can vary by plan, so it's important to check your plan's drug list for details.
- Referrals: A referral is permission from your Primary Care Physcian to see a specialist or other provider. Many doctors can send referrals electronically.
- Prior Authorizations (PA): A Prior Authorizations helps make sure a treatment or medicine is medically necessary. It’s a preapproval process that helps keep your costs down and keep you safe.
- Primary Care Physician (PCP): A primary care physician (PCP) is your main doctor. You can visit your PCP for routine medical care and annual exams. They can also diagnose and treat common medical conditions. They may refer you to specialists for additional care. Primary care is typically your first step in addressing a healthcare need, such as an illness, injury, or other health concern, or performing routine examinations for preventive care.
- Specialist: A physician specialist focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent or treat certain types of symptoms and conditions. Generally require a higher copay than a primary care physician.
- Over The Counter (OTC): Medicare Advantage plans often include an Over The Counter benefit (credit), which allows members to purchase eligible health and wellness products using a prepaid card or allowance during a specific time, like monthly or quarterly. The specific items covered are usually listed in the plan's Over The Counter catalog. The amounts available can vary by plan, so it's important to check your plan documents for details.
- Annual Notice Of Change (ANOC): The Annual Notice of Change for Medicare Advantage plans is a detailed document sent to enrollees each fall, detailing any changes in coverage, costs, and benefits that will take effect in the upcoming year’s plan. It is important to review this notice to determine if your current plan will still meet your healthcare needs.