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Education

Paths to Medicare Coverage

Medicare Parts A & B

Medicare Part A and Medicare Part B are managed by the federal government and provide Medicare-eligible individuals with coverage for and access to doctors, hospitals, or other health care providers who accept Medicare. The person with Medicare pays a fee for each service, and Medicare pays its share of an approved amount up to certain limits; the person with Medicare pays the rest.

Medicare Supplement Plans (optional)

Medicare Supplement insurance plans generally have higher monthly premiums than Medicare Advantage plans, but also generally have low, or no, co-payments for visits to doctors or hospitals. As such, they may be a good choice for people who are frequent utilizers of medical services. Medicare Supplement plans are also accepted by all doctors who accept Medicare patients, so they may be a good choice for people who travel frequently and want the certainty of knowing they can utilize their insurance benefits in any location if necessary. Medicare Supplement plans do not provide prescription drug benefits.

Medicare Parts A & B

Medicare Advantage Path

Medicare Advantage plans generally have lower monthly premiums but some may require co-payments for visits to doctors or hospitals. Additionally, recipients are required to secure services from physicians and facilities that are in the insurance company’s network. Medicare Advantage plans frequently provide prescription drug benefits, thus usually alleviating the need to purchase a separate Part D plan. This type of plan is well suited to people who visit doctors relatively infrequently and do so predominantly in the market in which they reside.

Medicare Advantage Plans

Consider the following when determining which Medicare coverage is right for you:

Medicare Parts A & B + Medicare Supplement Plan

What you can expect:

  • Accepted by any doctor or hospital that accepts Medicare Parts A & B patients. Acceptance is wider than that for most Medicare Advantage Plans.
  • For some plans, the premium may be the only thing that you will pay for Medicare-covered services. Most plans do not require a co-payment or co-insurance.
  • Premiums may be higher than a Medicare Advantage plan.

It may be a fit if:

  • You like to have the ability to see any doctor that accepts Medicare patients
  • You travel often

Enrolling in a Prescription Drug plan is recommended because Medicare Supplement plans do not provide coverage for these costs.

Medicare Advantage

What you can expect:

  • Generally, Medicare Advantage plans utilize a certain network of doctors. 
  • Per-visit fees are often charged through either a co-payment or co-insurance.
  • Most Medicare Advantage plans cover both medical and prescription drug expenses through a single premium.

It may be a fit if:

  • You are willing to see doctors that are within the plan's network.  (Plans often offer a lower cost option if the network doctors are used)
  • You don’t visit the doctor very often (per-visit charges)
  • You prefer to have your medical and prescription drug coverage under one plan with a single premium.

Medicare ABCs

Even if you’re not 65 yet, you may still be able to take advantage of Medicare. That’s because people of any age who are disabled, or have End-Stage Renal Disease (kidney failure), may qualify for Medicare.

To determine if you’re eligible for Medicare, you can use the Medicare Eligibility Tool at Medicare.gov.

Understanding Medicare Parts A through D

Medicare is made up of four basic parts: Part A (hospital coverage), Part B (medical insurance), Part C (managed care plans), and Part D (prescription drug coverage).

  Part A Part B
What does it cover? Hospital Insurance
Part A covers hospice care, home health care, skilled nursing facilities and inpatient hospital stays.
Medical Insurance
Part B covers physician fees and other medical services not requiring hospitalization.
How do I enroll? Enrollment may be automatic when you become Medicare-eligible, but early enrollment by those without SS or RRB benefits requires manual sign-up. Similarly, certain pre-existing conditions (such as ESRD) requires manual sign-up. You must choose to enroll.
Is there a premium? You usually don't pay a monthly premium for Medicare Part A (hospital Insurance) coverage if you or your spouse paid Medicare taxes while working. Yes. The monthly premium for Part B varies depending on when you were first enrolled in Part B and if you are subject to a premium surcharge due to your income level.
What is the deductible? The 2019 Part A hospital inpatient deductible is $1,364. The 2019 Part B deductible is $185 (this amount may be higher depending on your income).
Is there co-insurance? There is no co-insurance for your first 60 days of inpatient care. Part B covers 80% of medically necessary services. You are responsible for the remaining 20%.

Part C – Also known as Medicare Advantage, Part C refers to private health insurance plans that provide Medicare coverage. Private insurers who offer Medicare Advantage plans are required to provide the same benefits as Medicare Parts A and B, and some carriers provide even more benefits/services.

Medicare Advantage plans:

  • Must be approved by the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees the Medicare program
  • Must maintain a contract with CMS to provide Medicare coverage
  • Can offer prescription drug coverage (see Part D, below) as part of their plan offering
  • May offer additional services/programs not offered by Medicare Parts A & B
  • May require you to use a specific network of doctors and hospitals
  • May require you to pay additional premiums, copayments, coinsurance, deductibles or other out-of-pocket expenses

Part D – is Medicare prescription drug coverage. Sometimes referred to as PDP, Medicare prescription drug plans:

  • Are provided by private health insurance companies
  • Can be offered as stand-alone plans or as part of a Medicare Advantage plan
  • May require you to use specific pharmacies or get some of your medications by mail

How Much Does it Cost?

Part A is free for most people, as long as you are already receiving benefits from Social Security, or if you or your spouse paid Medicare taxes while working.

Part B requires you to pay a monthly premium, which can change from year to year..

Prices vary based on your selected plan and insurance carrier.

Medicare Advantage Plans

Medicare Advantage is comprised of a variety of private health plans, most often HMOs and PPOs, that private insurance companies offers as a coverage alternative to the traditional program (Part A and Part B). All plans must cover all the same benefits that traditional Medicare covers. However, the plans can charge different copayments (often lower than the traditional program but not always) and many offer extra benefits.

Most charge a monthly premium in addition to the Part B premium, but some don't. Most include prescription drug coverage at no additional cost as part of their plan. Some cover routine hearing and vision services as a separate package for an additional premium. Most plans require you to go to doctors and other providers within their service network or pay more or all of the cost for going out of network.

  Medicare Advantage Part C
  Health Maintenance
Organization (HMO)
Preferred Provider
Organization (PPO)
Private Fee-for-Service
(PFFS)
What does it cost? Except for emergencies, an HMO only covers care that is provided by primary care doctors, specialists or hospitals in the plan's network.

PPO plans cover visits
to any physician, whether they are in or out of the plan's network. However, you will pay less if you use primary care doctors, specialists and hospitals in the plan's network. A PPO usually includes a prescription drug plan.

PFFS plans cover visits to any primary care doctor, specialist or hospital that accepts the plan's terms of payment. PFFS plans usually include a prescription drug plan.

How do I enroll?

You can enroll in a Medicare Advantage Plan during your Initial Enrollment Period, the Medicare Advantage and Prescription Drug Plan Annual Enrollment Period and there are also Special Enrollment Periods for certain situations.

Is there a premium? Each Medicare Advantage plan sets its own premium, and that amount must be approved by the Centers for Medicare and Medicaid Services (CMS). In addition, you will continue to pay your Medicare Part B premiums.
What is the deductible? Whether a deductible exists for a plan and the amount of that deductible is determined by the carrier, and that amount must be approved by CMS.
Is there co-insurance or co-payment? Copay and coinsurance amounts are determined by the carrier, but those amounts must be approved by CMS.

Medicare Supplement Plans

Medicare Supplement insurance is designed to help pay for those health care costs not paid by Medicare Parts A & B. There are ten different plan options available to those who are enrolled in Medicare, and each provide coverage for a different mix of health services. Medicare Supplement and other supplemental health plans are not considered ‘family’ or ‘group’ plans so married couples will both need to obtain a Medicare Supplement health insurance policy to receive the benefits.

Benefits
Medigap Plans
A B C D F G K L M N
Part A Hospital Coinsurance Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
365 Hospital Reserve Days Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Part B coinsurance/co-payment Yes Yes Yes Yes Yes Yes 50% 75% Yes Yes
Blood Benefit (first 3 pints) Yes Yes Yes Yes Yes Yes 50% 75% Yes Yes
Hospice coinsurance/co-pay Yes Yes Yes Yes Yes Yes 50% 75% Yes Yes
Skilled Nursing Facility coinsurance No No Yes Yes Yes Yes 50% 75% Yes Yes
Part A deductible No Yes Yes Yes Yes Yes 50% 75% 50% Yes
Part B deductible No No Yes No Yes No No No No No
Part B excess charge No No No No Yes Yes No No No No
Foreign Travel Benefit No No 80% 80% 80% 80% No No 80% 80%
Out-of-pocket limit N/A N/A N/A N/A N/A N/A $5,560 $2,780 N/A N/A

Medicare Prescription Drug Coverage

Medicare Part D, or prescription drug coverage, is the most recent addition to the Medicare program. Now, anyone with Medicare Parts A and B is also eligible for Medicare Part D.

A few things to note about Part D:

  • Medicare prescription drug coverage is available only through private health insurers that are approved by Medicare
  • You can purchase a stand-alone plan (PDP), or your drug coverage may be included in a Medicare Advantage plan (Part C)
  • Prices and coverage may vary from plan to plan, so it pays to shop around
  • If you don’t sign up for prescription drug coverage (or have some other form of creditable drug coverage) as soon as you’re eligible, you’ll be charged a late enrollment penalty
  Part D Prescription Drug Coverage
What does it cover? Part D covers generic and brand-name drugs included in the plan's formulary.
How do I enroll? You can enroll in a Medicare Advantage Plan during your Initial Enrollment Period, the Medicare Advantage and Prescription Drug Plan Annual Enrollment Period and there are also Special Enrollment Periods for certain situations.
  • Is there a premium?
  • What is the deductible?
  • Is there co-insurance?
Whether you pay a Part D premium, deductible or co-insurance depends on the plan you choose, as each Part D plan has a different cost-sharing structure. Dependent on the plan, you may pay both a monthly premium and a share of the cost of your prescriptions (co-insurance or co-payment) in a Part D plan.

Two Ways to Get Coverage

While Medicare prescription drug coverage is only available through private health insurers, there are two ways you can receive your coverage:

  • A stand-alone Medicare Prescription Drug Plan (PDPs)
  • A Medicare Advantage (Part C) plan with prescription drug coverage included (MA-PD)

If you have Medicare Parts A & B and don’t want to switch to a Medicare Advantage plan, then you’ll need to enroll in a stand-alone PDP to avoid a late enrollment penalty (unless you have creditable coverage). While many Medicare Advantage plans offer prescription drug coverage as part of the plan, there are some that don’t. If you have a Medicare Advantage plan that doesn’t offer drug coverage, you’ll need to find a stand-alone PDP.

Things to Consider When Choosing a Prescription Drug Plan

While price is always important, it’s not the only thing to consider when shopping for a prescription drug plan. You’ll want to keep these other issues in mind when making a decision:

  • Formulary
    A plan’s formulary is just a list of the medications the plan covers. If one or more of the medications you take is not on a plan’s formulary, you may want to look elsewhere.
  • Network
    Most plans have a network of pharmacies they want you to use in order to get the best prices. If you go to a pharmacy that’s not in your plan’s network, you may have to pay more for your prescriptions. Make sure your preferred pharmacy is in your plan’s network.
  • Mail Order
    Many prescription drug plans can give you a lower price if you have your medicine sent to you by mail. The plan may also require that you get a 3-month supply at a time. In most cases, this isn't a problem, but you may want to check with your doctor to make sure mail order is right for your medicines.
  • Service & Convenience
    If you have a Medicare Advantage plan with prescription drug coverage, there’s generally just one company to contact if there’s ever an issue with your coverage. If your prescription drug plan is with a different carrier than your other Medicare coverage, it may be more difficult to coordinate benefits between plans.

Medicare Donut Hole

The Donut Hole is the coverage gap that occurs when you and your Medicare drug plan have reached a pre-determined spending limit for covered drugs and you begin to pay for your drugs “out-of-pocket”. While in this coverage gap you will pay no more than 25% of the cost for brand name drugs, (37% for generic drugs) “out of pocket” until you reach the catastrophic coverage point. Once you reach this point, your Medicare drug coverage plan will begin again and you will only pay a small co-insurance or copayment for each prescription until the end of the year.

For example, in 2019, once you have spent $3,820 on covered drugs, the coverage gap will start. You will not reach catastrophic coverage until you have spent $5,100 out-of-pocket for the year.

Medicare Prescription Drug Coverage Gap (Donut Hole)

Medicare Prescription Drug Coverage Gap (Donut Hole)

Late Enrollment Penalties (Part B and Part D)

Why There’s a Penalty

It takes a lot of money and resources to run Medicare. But making sure that Medicare is available to everyone who needs it—today, and in the future—is something from which many may benefit. That’s why enrolling in Parts B & D as soon as we’re eligible is so important.

The reason is simple…if everyone waited until they were sick to enroll in Part B or Part D, Medicare would never be able to sustain itself. The cost of paying for care for individuals who are ill and/or require expensive medications would far outstrip the amount of money taken in by Medicare in the form of premiums and taxes. So Medicare needs everyone to begin paying their premiums for Parts B and D as soon as they’re eligible so there’s enough money to care for everyone when they need it.

Understanding Enrollment in Medicare Part B

For most people, enrollment in Medicare Parts A & B is automatic. When you turn 65, and start receiving Social Security or Railroad Retirement Board benefits, you’re automatically enrolled in Medicare Parts A & B.

There are instances, however, when you may not be enrolled in Part B. This may be because you, or your spouse, have other health insurance through an employer. Or maybe you had Part B at one time, and then dropped it when you got other insurance.

Whatever the case, if you have no other insurance and you’re eligible for Part B, you must enroll to avoid a penalty.

How Much is the Late Enrollment Penalty for Part B?

For every 12-month period you don’t enroll in Part B when you’re eligible, you’ll pay an extra 10% of your monthly premium. If you didn’t enroll for two years, for example, you’d pay a penalty of 20% per month. Worst of all, you’ll continue to pay that penalty for as long as you have Medicare.

Keep in mind that Medicare has some special enrollment periods that may help you avoid a Part B late enrollment penalty.

Understanding Enrollment in Medicare Part D

Part D, Medicare Prescription Drug Coverage, is different from Part B in two important ways. First and foremost, enrollment in a Medicare Prescription Drug Plan (PDP) is never automatic. Secondly, the only way you can get a Medicare Prescription Drug plan is through a private insurance carrier. If you’re eligible for Medicare Parts A & B and don’t have creditable prescription drug coverage from an employer or other source, you’re eligible for Part D.

Unlike Part B, premiums for Medicare Prescription Drug Plans will vary between different insurance carriers. One company may even have several different drug plans, all with different premiums and coverage levels.  When you join a Medicare drug plan, the plan will tell you if you owe a penalty, and what your premium will be. You may have to pay this penalty for as long as you have a Medicare drug plan. If you had to pay a Part D late enrollment penalty before you turned 65, the penalty will be waived once you reach 65.

How Much is the Late Enrollment Penalty for Part D

Calculating the late enrollment penalty for Part D is a bit more complicated, mostly because Part D premiums aren’t standard. In addition, you can be penalized anytime you go a period of 63 days or more without a Medicare prescription drug plan or some other creditable coverage (from a former employer, for example).

The penalty itself is calculated by multiplying 1% of the national base beneficiary premium by the number of full months you were eligible for coverage, but didn’t enroll. The final amount will be added to your monthly premium.

FAQ's

In most cases  you are eligible for Medicare if you or your spouse worked for at least 10 years in Medicare-covered employment and you are 65 years or older and a citizen or permanent resident of the United States. If you aren’t yet 65, you might also qualify for coverage if you have a disability or suffer from End-Stage Renal disease (permanent kidney failure requiring dialysis or transplant).

You can get Part A at age 65 without having to pay premiums if:

  • You receive retirement benefits from Social Security or the Railroad Retirement Board.
  • You are eligible to get Social Security or Railroad benefits but haven't yet filed for them.
  • You or your spouse had Medicare-covered government employment.

If you are under 65, you can get Part A without having to pay premiums if you have:

  • Received Social Security or Railroad Retirement Board disability benefits for 24 months.
  • End-Stage Renal Disease and meet certain requirements.

While you don’t have to pay a premium for Part A if you meet one of those conditions, you must pay for Part B if you want it. The Part B monthly premium in 2019 is $135.50.

Note: You will be eligible for Medicare when you turn 65 even if you are not eligible for Social Security retirement benefits.

Initial Enrollment
Reason What can you do Enrollment Period

You’re newly eligible for Medicare because you turn 65.

Sign up for a Medicare Advantage Plan (with or without prescription drug coverage) or a Medicare Prescription Drug Plan.

During the 7-month period that starts 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.

You’re newly eligible for Medicare because you’re disabled and under 65.

Sign up for a Medicare Advantage Plan (with or without prescription drug coverage) or a Medicare Prescription Drug Plan.

Starting 21 months after you get Social Security or RRB benefits. Your Medicare coverage begins 24 months after you get Social Security or Railroad Retirement Board (RRB) disability benefits. Your chance to sign up lasts through the 27th month after you get Social Security or RRB benefits.

You’re already eligible for Medicare because of a disability, and you turn 65.

Sign up for a Medicare Advantage Plan (with or without prescription drug coverage) or a Medicare Prescription Drug Plan.
■■
Switch from your current Medicare Advantage or Medicare Prescription Drug Plan to another plan.
■■
Drop a Medicare Advantage or Medicare Prescription Drug Plan completely.

During the 7-month period that starts 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.

If you sign up for a Medicare Advantage Plan during this time, you can drop that plan at any time during the next 12 months and go back to Medicare Parts A & B.

You DON’T have Medicare Part A coverage, and you enroll in Medicare Part B during the Part B General Enrollment Period (January 1–March 31).

Sign up for a Medicare Prescription Drug Plan.

Between April 1–June 30.

You HAVE Medicare Part A coverage, and you enroll in Medicare Part B during the Part B General Enrollment Period (January 1–March 31).

Sign up for a Medicare Advantage Plan (with or without prescription drug coverage) or a Medicare Prescription Drug Plan.

Between April 1–June 30.


Annual Enrollments
Enrollment Period What can you do

October 15–December 7
The Medicare Advantage and Prescription Drug Plan Annual Enrollment Period (AEP)
(Changes will take effect on January 1.)

Change from Medicare Parts A & B to a Medicare Advantage Plan.
■■
Change from a Medicare Advantage Plan back to Medicare Parts A & B.
■■
Switch from one Medicare Advantage Plan to another Medicare Advantage Plan.
■■
Switch from a Medicare Advantage Plan that doesn’t offer drug coverage to a Medicare Advantage Plan that offers drug coverage.
■■
Switch from a Medicare Advantage Plan that offers drug coverage to a Medicare Advantage Plan that doesn’t offer drug coverage.
■■
Join a Medicare Prescription Drug Plan.
■■
Switch from one Medicare Prescription Drug Plan to another Medicare Prescription Drug Plan.
■■
Drop your Medicare prescription drug coverage

January 1–March 31

If you’re in a Medicare Advantage Plan, you can leave your plan and switch to Medicare Parts A & B. Your Medicare Parts A & B coverage will begin the first day of the following month.
■■
If you switch to Medicare Parts A & B during this period, you will have until February 14 to also join a Medicare Prescription Drug Plan to add drug coverage. Your prescription drug coverage will begin the first day of the month after the plan gets your enrollment form.
Note: During this period, you can’t:
■■
Switch from Medicare Parts A & B to a Medicare Advantage Plan.
■■
Switch from one Medicare Prescription Drug Plan to another.
■■
Join, switch, or drop a Medicare Medical Savings Account Plan.

Here are five tips for seniors researching their plan options from the experts at Medicare Solutions:

  1. Check your coverage. Although seniors were promised no changes to Medicare in recent legislation, be sure your existing plan was not changed or eliminated. You should be notified by your carrier.
  2. Revisit your RX costs. Because prescription drug coverage is not available as part of a Medicare supplement, those who choose a Medicare Supplement plan typically also enroll in a Part D Prescription Drug Plan (PDP). MA plans, governed by private carriers, can change their plan’s prescription drug formulary or change co-payments.
  3. Consider your out-of-pocket costs. Though some MA plans cost an additional monthly premium, some with different coverage options are available at zero premiums. Review changes in your out-of-pocket costs, including office, hospital and surgery co-pays.
  4. Location, location, location. MA plans available to seniors differ based on the state in which they reside. Seniors usually have many health plans to choose from based on their residency. If you spend part of the year in different states, you’ll want a Medicare Supplement plan or a MA plan with a national network.
  5. Most Medicare Supplement plans increase rates on dates other than January 1st. So review last year’s rate change and consider that you may get a similar increase at the same time next year.

If you have a Medicare Advantage Plan, during the Medicare Advantage Open Enrollment Period you have these options:

  • Make no changes and stay with your current plan
  • Disenroll from your Medicare Advantage Plan and return to Medicare Parts A & B Parts A and B. If you need Prescription Drug coverage you can then enroll in a Part D Prescription Drug Plan.
  • Those who are leaving their Medicare Advantage plan could choose to apply for a Medicare supplement policy providing they qualify under the terms of the policy they wish to purchase. Seniors can enroll in a Medicare supplement policy at any time throughout the year.
  • Members who have a separate Prescription Drug Plan, but are not enrolled in a Medicare Advantage plan may not make any change to their current Prescription Drug Plan and may not enroll in a Medicare Advantage plan.

If you don’t have a Medicare Advantage Plan:

  • Medicare recipients not enrolled in any Part C Medicare Advantage plan are not allowed to make changes in their Medicare coverage, unless they choose to purchase a Medicare supplement plan. These can cover most gaps in expensive coverage. Some of these plans, offered by private insurance companies, may have plans that offer no underwriting.

Prescription drugs can be extremely beneficial for those in need. With the advent of new prescription medication, more and more Americans are living comfortable lives free of ailment. These benefits come at a cost, however. Prescription drugs can be very expensive, especially those that do not have readily available generics. Luckily, for those of us that qualify for Medicare, the cost of these prescription drugs can be greatly reduced with a Medicare Part D Prescription Drug Plan.

Medicare Drug Plans help to cover the costs of medication for those enrolled. They can exist on their own as a separate plan or as part of a Part C Advantage Plan. Part D Drug Plans were introduced to help more Americans get the medication they need in an affordable way, but not all medications are covered by all Part D Plans.

When researching Drug Plans, it's very important to make sure your specific medication is covered by your desired plan.

Since 2011, in accordance with changes mandated by the Affordable Care Act (ACA), beneficiaries have gained increased access to many important preventative services and screenings, paid for in most cases, without any cost-sharing obligations.

This means that if you are enrolled in traditional Medicare (Part A & B), a Medicare Advantage Plan (Part C), or Medicare Supplement Policy (supplemental plan) these procedures are paid for without being subject to annual deductibles or (20%) coinsurance.

Health reform policy makers are focusing on early detection of disease as the optimal way to maintain good health and reduce overall health care costs on a national level. Though these new policies have reduced barriers to more preventative care/screening procedures, the changes will only become viable if beneficiaries are informed and take advantage of what is now covered.

Here is a list of a few of the services covered:

  • Yearly Wellness Visits
  • Cardiovascular Screenings
  • Diabetes Screening
  • Colon Cancer Screening
  • Mammogram (Breast Cancer Screening)
  • Prostate Cancer Screenings (PSA)

Medicare is a federal entitlement program designed to provide medical coverage to Americans sixty-five and over. The program also covers all those with End Stage Renal Disease and many disabled individuals.

There are five components of Medicare.

  • Part A (or Medicare Parts A & B) provides inpatient hospital coverage to nearly all Americans over sixty-five.
  • Part B provides medical coverage for doctors’ visits, outpatient care, and some preventative services and costs the same low monthly premium for almost everyone.
  • Part C refers to the Medicare Advantage plans available through private health insurance companies which provide all the benefits of Parts A & B in addition to other advantages like vision, hearing, and prescription drug coverage for an extra monthly premium.
  • Part D refers to prescription drug plans available through private insurers which may be added on to one’s Parts A & B coverage.
  • The fifth component of Medicare is the Medicare Supplement (or Medigap) Plan option from a private insurer which is meant to help fill in the gaps in coverage of Parts A & B like copayments, coinsurance, and deductibles for an additional monthly premium.

Medicaid is a similar entitlement program meant to address the needs of a different population: the impoverished, children, pregnant women, and the disabled. Medicaid is a state-federal cooperative effort to provide basic medical assistance to individuals who cannot afford private health insurance on the individual market or through their employer.

Medicaid works much like having private health insurance: enrollees are given a card to present at the doctor’s office and if the doctor participates in Medicaid the state will pay for the appointment minus the contribution of any other health insurance the individual carries. There are different eligibility requirements in each state, but all states have an income ceiling which recipients must be below.

Medicare Coverage and Long-Term Care

The term "Long-Term Care," also known as custodial care, is used to refer to a range of medical and non-medical services that are needed by people who are disabled and those who suffer from chronic diseases. Medicare does not cover these services, so it is important to understand your options if you need long-term care.

Long-term care also includes non-medical care, such as unskilled personal assistance — this is referred to as custodial care. You can get custodial coverage in a variety of ways. One way is to purchase long-term care insurance. This doesn’t replace your Medicare coverage and is provided by private insurance companies.

It is important to realize that, because these policies are insurer-specific, the cost can vary and so can the rules and type of services covered. For example, some policies only cover nursing home services, while others provide a wide range of additional coverage.

Finally, you can use PACE or Medicaid if you qualify for it. PACE stands for Programs of All-inclusive Care for the Elderly and provides medically-necessary services that are needed by people who require long-term or custodial care services. Medicaid pays for various health care services, and assists citizens who have limited income and resources.

Medicare Glossary

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z

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Advance Directive
Written documents that describe the type of care you’d like to receive, or not receive, if you’re ever too ill or injured to speak for yourself. In addition to a living will, an Advance Directive includes a designated health care proxy, someone who can speak on your behalf to doctors and health care providers in the event that you can’t do so yourself.

AEP (Annual Election Period)
The time when you can join, switch or drop Medicare plans, including Medicare Advantage or Medicare Prescription Drug Plans (PDP). The AEP currently takes place from October 15 through December 7 each year.

Assignment
Medicare pays doctors, hospitals and other health care providers a set amount for specific procedures and items. If a doctor agrees to accept what Medicare will pay as full payment for the bill, he or she has accepted assignment and you won’t be charged anything additional (though copayments and deductibles may still apply).

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Beneficiary
The person receiving benefits from Medicare.

Benefit Period
Time spent receiving inpatient care at a hospital or skilled nursing facility. The benefit period typically begins on the day you are admitted as an inpatient to the facility, and ends when you haven’t received any inpatient care for 60 days in a row. When a new benefit period starts, you may be responsible for additional costs, including deductibles and copayments.

Bone Mass Measurement
A preventive care service that measures bone density to determine if you are at risk for breaking a bone. Medicare Part B covers a bone mass measurement once every two years, or more frequently if you have certain conditions.

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CAH (Critical Access Hospital)
Hospital/facility that provides outpatient care and limited inpatient services, typically in more rural areas.

CMS (The Centers for Medicare and Medicaid Services)
CMS is the government agency that oversees and administers the Medicare and Medicaid programs. Private health insurers that provide Medicare Advantage plans and/or Medicare Prescription Drug Plans (PDP) must be approved by, and have a current contract with, CMS.

Copayment
The amount you must pay, usually a flat fee, for a specific health care product or service. Medicare and many Medicare Advantage plans require that you pay a small copayment for doctor visits, outpatient hospital visits, prescriptions and more.

Coinsurance
The amount you must pay, after deductibles, for health care services. Your coinsurance payment is usually a percentage of the total cost of the service, instead of a flat fee.

Coverage Gap
A Medicare Prescription Drug Plan (PDP) will pay a portion of your drug costs up to a pre-set limit. Once that limit is reached, the plan stops paying and you are responsible for your drug costs at a discounted price. This is known as the coverage gap, or “donut hole”. Once you reach another pre-determined amount of spending on drugs, the PDP kicks back in and pays an even higher portion of your drug costs.

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Deductible
Just like with home and automobile insurance, a deductible is a set amount that you must pay for services before your Medicare coverage kicks in.

Deemed
If you have a type of Medicare Advantage Plan known as Private Fee For Service (PFFS), you’ll want to be sure that each doctor or other health care provider you visit is deemed. Similar to assignment, being deemed means that your provider is willing to accept as payment in full whatever amount your plan is willing to pay for a service.

DME (Durable Medical Equipment)
Reusable health care products used at home that are expected to last five years or more. Examples include wheelchairs, walkers, hospital beds, oxygen equipment and the like.

Donut Hole
Another name for the coverage gap. A Medicare Prescription Drug Plan (PDP) will stop paying for a portion of your medications once a pre-set spending limit is met. At this point, the beneficiary has reached the “donut hole” and is responsible for paying their drug costs at a discounted price. Once payments reach another pre-set spending limit, the drug plan kicks back in and begins paying a higher portion of the beneficiary’s drug costs.

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ESRD (End-Stage Renal Disease)
Permanent kidney failure requiring dialysis and/or a transplant. People with ESRD may qualify for Medicare, even if they aren’t 65.

Extra Help
A Medicare program to help people with low income and limited resources to pay for prescription drug coverage. Also known as the Low-Income Subsidy (LIS).

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FFS (Fee for Service)
A health care payment system where each service is identified and paid for separately. Medicare Parts A & B is based on the fee for service model.

Formulary
A list of drugs, both brand and generic, that an insurance plan will cover.

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Generic Drug
A prescription medication made up of the same active ingredients as its brand-name counterpart. Generic drugs often cost less than brand-name drugs. Generic drugs must be approved by the U.S. Food and Drug Administration (FDA), just like brand-name drugs.

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HIPAA (Health Insurance Portability and Accountability Act)
Put in place in 1996, HIPAA requires certain health care organizations to take specific steps to protect patients’ private information. It also helped make it easier for consumers to get health insurance when changing jobs or simply purchasing individual health coverage.

HMO (Health Maintenance Organization)
A type of health plan where patients see increased savings by visiting doctors, hospitals and other providers in a pre-defined network. Many HMOs also require patients to select a Primary Care Physician (PCP) who will act as a gatekeeper, referring patients, as needed, to physician specialists and health care facilities that are in the HMO’s network.

Hospice
Care specifically designed for terminally ill patients, sometimes provided in the home. Hospice care focuses on relieving pain (palliative care) and helping patients and their families with end-of-life issues.

Home Health Care
Health care services that can be provided effectively in a home setting. Home health services are often more convenient, and less expensive, for the patient. Examples of home health services include physical, occupational and speech therapy, wound care, injections or infusion therapy, help with activities of daily living (bathing, dressing, etc.) and more.

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Inpatient Services
Services you receive once you are officially admitted to a hospital or skilled nursing facility. Services may include room and board, surgical/medical services, therapeutic services, etc.

In-Network Provider
A doctor, hospital, pharmacy or other health care provider that has a contracted with your health insurance plan to provide care to the plan’s members. Plan members typically must pay more, or all, to see a provider outside the health plan’s network.

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Late EnrollmentPenalty
Late Enrollment Penalties are monetary penalties imposed by Medicare on those who do not sign up for Part A, Part B, or Part D coverage when they are eligible. Late Enrollment Penalties are slightly different for each of the three mentioned parts of Medicare, but they will always result in an increased premium for service.

LIS (Low-Income Subsidy)
Also known as “Extra Help”, the low-income subsidy is a Medicare program to help beneficiaries with limited income pay for their prescription drugs at a

Living Will
Part of an Advance Directive, a living will lets you describe exactly what type of life-prolonging treatments you may want, or not want, should you become serious ill, injured or incapacitated. It’s typically used in conjunction with a health care proxy (durable power of attorney) to ensure that your wishes for your own medical care are carried out in the event you can’t communicate them for yourself.

Long-Term Care
Services and care provided to people who have a chronic illness or disability. Long-term care can be provided at home or in a facility.

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Medicare Advantage
Private insurance that covers everything Medicare Parts A & B covers, and sometimes more. Also known as Part C, Medicare Advantage plans must be approved by, and have a contract with, CMS.

MA-PD (Medicare Advantage with Prescription Drug Plan)
Private insurance that covers everything Medicare Parts A & B covers, and sometimes more. Also known as Part C, Medicare Advantage plans must be approved by, and have a contract with, CMS. Medicare prescription drug coverage is only available through private insurance companies, and is included in this plan type.

Medicare Parts A & B
Medicare coverage provided by the federal government, as opposed to Medicare Advantage and Medicare supplement plans provided by private insurers.

Medicare Supplement
Also known as Medicare supplement plans, Medicare Supplement plans cover many of the out-of-pocket expenses that come with traditional Medicare. These include deductibles, copayments, coinsurance and more. Private health insurers provide Medicare Supplement plans and availability varies by state.

MOOP (Maximum Out-of-Pocket)
Maximum Out-of-Pocket is the most you could pay in fees (deductibles, copayments, coinsurance, etc.) in any give year, as defined by your health plan.

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Network
A list of doctors, hospitals, pharmacies and other health care providers that have contracts with an insurance plan to provide services to members. By visiting providers in the health plan’s network, members, and the plan itself, can realize lower health care costs overall.

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Out-of-Pocket
Expenses that are paid by the beneficiary, not Medicare, such as deductibles, copayments, coinsurance and the like.

Outpatient Services
Services provided to a patient without having to be admitted to a hospital, skilled nursing facility or similar environment.

Out-of-Network
Beneficiaries who visit doctors, hospitals and other providers not on their health plan’s list of providers are said to be going “out-of-network”. Plan members typically must pay more, or all, to see a provider outside the health plan's network.

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PPO (Preferred Provider Organization)
A network of doctors, hospitals and other health care providers that provide services to an insurance company for discounted rates. Unlike an HMO, PPOs typically don’t require that patients use a Primary Care Physician (PCP) as gatekeeper for all care. However, as with an HMO, costs will be higher for visiting a provider that’s not in the PPO network.

PFFS (Private Fee For Service)
A specific type of Medicare Advantage (Part C) plan that allows beneficiaries to see almost any doctor, hospital or other health care provider, as long as that provider is deemed. A deemed provider is one that has accepted the payment terms and conditions of the Medicare Advantage PFFS plan before services are rendered.

POS (Point of Service)
A type of managed care plan that combines aspects of both an HMO and a PPO. Patients with a POS plan typically choose a Primary Care Physician (PCP) to act as gatekeeper. The PCP can refer the patient to any provider, however, inside or outside of the POS network. Patients will pay more for visiting providers outside the network.

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Referral
In some managed care plans (HMO, POS), your Primary Care Physician (PCP) may send you to see another provider for more specialized care. Your HMO or POS may require a written explanation of the referral from your PCP before it will cover any associated costs.

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SNF (Skilled Nursing Facility)
For services that can only be provided by a nurse or doctor, but don’t require the full resources of a hospital, patients can visit a Skilled Nursing Facility. Services offered may include intravenous injections, rehabilitation services and more.

SHIP (State Health Insurance Assistance Program)
Federally-funded state programs that provide one-on-one counseling to people with Medicare, and their families.

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TTY (Teletypewriter)
A device that allows people with hearing or speech impairments to communicate via the telephone.

Tier
Health plans sometimes segment their prescription drug formularies into tiers. Each tier typically has a different cost. Patients can quickly get an idea of how much they may pay for a medication based on the tier in which it appears.

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Urgent Care
Care delivered to patients with an illness or injury that requires immediate attention, but doesn’t require a trip to the emergency room. Most urgent care centers allow walk-in patients without an appointment, and costs can be much lower than visiting an emergency room.

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