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accepting assignment
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In Part B, a doctor “accepts assignment” when he or she agrees to take payment of the Medicare-approved amount as payment in full for a service. If a doctor accepts assignment, your client’s share of the cost is limited to their co-insurance payment (usually 20 percent of the Medicare-approved amount). See also Medicare-approved amount
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annual election period
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The period from November 15 through December 31 of each year. During the annual election period, your client may enroll in any Medicare Advantage plan available to them, including prescription drug coverage. NOTE: The annual election period does not apply to Medicare supplement. Eligible applicants can enroll year round in a Medicare supplement plan.
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balance billing
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In Part B, an additional payment your client makes to a doctor who doesn’t accept assignment. The doctor may not bill your client more than an additional 15 percent of the Medicare-approved amount. Some states limit balance billing to a smaller percentage or forbid it entirely. Another name for balance billing is “excess charges”. See accepting assignment.
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brand-name drug
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A prescription drug that is sold under a trademarked brand name. See generic drugs.
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benefit period
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In Part A, a period of time that begins when your client enters a hospital and ends when your client has been out of the hospital for 60 days in a row.
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benefit period
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The way that the Original Medicare Plan measures use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day a member goes to a hospital or skilled nursing facility. The benefit period ends when the member hasn’t had any inpatient hospital care (or skilled care in a SNF) for 60 days in a row. If one goes into a hospital or a skilled nursing facility after one benefit period has ended, a new benefit period begins. The member must pay the inpatient hospital deductible for each benefit period. There is no limit to the number of benefit periods, although inpatient mental health care in a psychiatric hospital is limited to 190 days in a lifetime.
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catastrophic coverage
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In Part D, a name for the step of a drug plan in which your client pays only a small co-insurance or small co-payment for a covered drug, and your client’s plan pays the rest of the cost for the remainder of the year. Your client reaches catastrophic coverage once they have spent $3,850 (2007) out-of-pocket for covered drugs in a single year. This limit will be $4,050 for 2008 plans.
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Centers for Medicare & Medicaid Services (CMS)
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The federal government agency that runs the Medicare program, and works with the states to manage their Medicaid programs.
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co-insurance
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A kind of cost sharing where costs are split on a percentage basis. For example, Part B might pay 80 percent, and your client would pay 20 percent.
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coordinated care
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In Part C, health care plans that coordinate your care by the doctors and hospitals your client visits. These plans may have some restrictions on the doctors and hospitals your client can use for their care. You may also hear these plans referred to as “managed care” plans.
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copayment
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A kind of cost sharing where you pay a pre-set, fixed amount for each service. In a Part D plan, for example, your client might pay $10 for each prescription they receive. Sometimes called a “co-pay.”
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cost sharing
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A term for the way Medicare shares health care costs with your client. The most common types of cost sharing are deductibles, co-payments, and co-insurance.
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coverage gap
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A name for the step in a Part D plan in which your client pays all of their expenses for eligible drugs, until they have spent $3,850 (2007) in a single year. For 2008, this limit will be $4,050. Some people call this coverage gap the “doughnut hole.”
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Creditable Coverage
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Certain kinds of previous health insurance coverage that can be used to shorten a pre-existing condition waiting period under a Medigap policy. Also, please see ’creditable drug coverage’ below.
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creditable drug coverage
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Prescription drug coverage, from a plan other than a Part D stand-alone plan or a Medicare Advantage plan with drug coverage, which meets certain Medicare standards. If your client is currently enrolled in a drug plan that gives them prescription drug coverage, their plan will tell you if it meets the Medicare standards for creditable drug coverage.
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custodial care
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Care that provides help with the activities of daily life, like eating, bathing, or getting dressed. Most long-term care is custodial care.
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deductible
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A kind of cost sharing where your client will pay a pre-set, fixed amount first, before Medicare or other insurance starts to pay. In Part B in 2007, for example, your client must pay a deductible of $131 for the year. The deductible is $135 for 2008.
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dual eligible
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A person who is eligible for both Medicare and Medicaid.
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excess charges
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If the member is in the Original Medicare Plan, this is the difference between a doctor’s or other health care provider’s actual charge (which may be limited by Medicare or the state) and the Medicare-approved payment amount.
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generic drug
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Prescription drugs that have the same active ingredient formula as a brand-name drug. Generic drugs usually cost less than brand-name drugs and are rated by the Food and Drug Administration (FDA) to be as safe and effective as brand-name drugs.
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guaranteed renewable policy
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A feature of Medigap policies. A “guaranteed renewable” policy must be renewed by the company automatically each year, so long as your client pays the premium and don’t commit any fraud on the insurance company.
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guaranteed issue rights
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Rights the member has in certain situations when insurance companies are required by law to sell or offer a Medigap policy. In these situations, an insurance company can’t deny the prospect a Medigap policy, or place conditions on a Medigap policy, such as exclusions for pre-existing conditions, and can’t charge the prospect more for a Medigap policy because of past or present health problems.
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Health Maintenance Organization (HMO) Plan
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In Part C, a type of Medicare Advantage plan in which your client must use doctors and hospitals in the plan’s network for your client’s care. If your client goes outside the network, they are responsible for paying for their own care.
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high deductible Medicare Advantage plans
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A health insurance plan in which your client pays a significant deductible (usually more than $1,000) before the plan begins to help with your client’s costs. See Medical Savings Accounts Plans.
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home health care
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In Part A and Part B, skilled nursing care and therapy, such as speech therapy or physical therapy, provided to the homebound on a part-time or intermittent basis.
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hospice care
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Care for those who are terminally ill. Hospice care typically focuses on controlling symptoms and managing pain. In Part A, hospice care also includes support services for both patient and caregivers. Part A covers both hospice care received at home and care received in a hospice outside the home.
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initial enrollment period
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A seven-month period that begins three months before the month of your client’s eligibility for Medicare, and ends three months after the month of your client’s eligibility. During your client’s initial enrollment period, your client will be able to sign up for plans that may either be unavailable or cost more if they wait until later to join.
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inpatient care
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Care your client receives in a hospital when they are admitted for an overnight stay.
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lifetime reserve days
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In Part A, a reserve of 60 days of care that Part A will pay for during your client’s lifetime. Your client can choose to use lifetime reserve days any time they stay in a hospital longer than 90 days. A lifetime reserve day cannot be replaced. When it is used up, it is gone.
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long-term care
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Care that gives help with the activities of daily life, like eating, dressing, and bathing, over a long period of time. Most long-term care is custodial care. See custodial care.
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Medicaid
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A program that pays for medical assistance for certain individuals and families with low incomes and few resources. Medicaid is jointly funded by the federal and state governments and managed by the states. Medicaid includes programs that help eligible persons pay Medicare premiums and cost sharing. See dual eligible and Medicare Savings Program.
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Medical Savings Account (MSA) Plans
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In Part C, a type of Medicare Advantage plan that combines a special bank savings account for your client’s medical expenses with a high deductible Medicare Advantage plan. See also high deductible Medicare Advantage plans.
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Medically Necessary Care
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Services or supplies that are needed to diagnose or treat a medical condition, according to the accepted standards of medical practice.
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Medical Underwriting
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The process that an insurance company uses to decide, based on a prospect’s medical history, whether or not to take an application for insurance, whether or not to add a waiting period for pre-existing conditions (if that state law allows it), and how much to charge the prospect for that insurance.
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Medicare
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A federal government health program for people 65 or older, people under age 65 with certain disabilities, for people of all ages with end-stage renal disease. (permanent kidney failure requiring dialysis or kidney transplant) or amyotrophic lateral sclerosis (Lou Gehrig’s disease).
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Medicare Advantage
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A type of Medicare plan offered by a private company. In Medicare Advantage plans, a single plan provides your client with both hospital and doctors’ care. Many Medicare Advantage plans also include prescription drug coverage.
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Medicare Savings Program
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Medicaid program that helps eligible people pay some or all Medicare premiums and deductibles.
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Medicare Select
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A special type of Medigap policy that requires your client to use specific hospitals, and in some cases, specific doctors, to get your client’s full insurance benefits (except in an emergency).
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Medicare-approved amount
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The amount of money that Medicare has approved as the total amount that a doctor or hospital should be paid for a particular service. The total amount includes what Medicare pays, plus any cost sharing your client pays.
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Medicare supplement insurance
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Also called Medigap. An insurance policy your client buys from a private insurance company that pays for some or all of the cost sharing, or gaps in coverage, such as deductibles, co-payments, and co-insurance, in Medicare Part A and Part B coverage. Medigap policies are available in up to 12 standard types, or “plans”. Each plan is named with a letter of the alphabet. Don’t confuse Plans A, B, C, and D with Part A, B, C, and D of Medicare.
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Network
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In Part C and D, the group of providers, such as pharmacists, doctors and hospitals, who agree to provide care to the members of a Medicare Advantage coordinated care plan or Prescription Drug Plan. These providers are called “network providers” or “network pharmacies”.
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Original Medicare Plan
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The Original Medicare Plan has two parts: Part A (Hospital) and Part B (Medical). It is a fee-for-service health plan. Medicare pays its share of the Medicare-approved amount, and the member pays their share (coinsurance and deductibles).
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open enrollment period
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The period January 1 through March 31 of each year. During the open enrollment period your client may switch from some types of Medicare plans to other like plans or return to Original Medicare. Your client may not add or drop prescription drug coverage during this period.
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outpatient care
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Care your client receives as a hospital patient if your client doesn’t stay overnight, or care your client receives in a free-standing surgery center where your client doesn’t stay overnight.
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out-of-pocket maximum
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A limit that some plans set on the amount of money your client will have to spend out of your client’s own pocket. In Part D, this is the maximum amount of money your client will have to spend out of their own pocket before catastrophic coverage begins. See catastrophic coverage.
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PACE
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An abbreviation for Programs of All-inclusive Care for the Elderly. A program that helps frail seniors live independently in their communities for as long as possible by providing them with a combination of medical, social, and long-term care services. PACE is available only in states that have chosen to offer it as part of their Medicaid program. See Medicaid.
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Part A
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The part of Original Medicare that provides help with the cost of hospital stays, skilled nursing services following a hospital stay, and some other kinds of skilled care. Don’t confuse this with a Medigap Plan A, which is a type of Medigap policy.
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Part B
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The part of Original Medicare that provides help with the cost of doctor visits and other medical services that don’t involve overnight hospital stays.
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Part C
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The part of Medicare that offers plans that combine help with hospital costs with help for doctor’s visits and other medical services. Part C plans are referred to as “Medicare Advantage” plans. See also Medicare Advantage.
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Part D
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The part of Medicare that offers help with the cost of prescription drugs. Your client can get Part D coverage as part of a Medicare Advantage Plan, or as a stand-alone drug plan.
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Point-of-Service (POS) Plan
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In Part C, a type of Health Maintenance Organization (HMO) plan that lets your client use doctors and hospitals outside the plan if your client pays more. See Health Maintenance Organization (HMO) Plan.
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Preferred Provider Organization (PPO)
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In Part C, a type of Medicare Advantage plan in which your client can use either preferred doctors or hospitals, or go to non-preferred doctors and hospitals. If your client uses non-preferred providers, though, they will usually pay a larger share of the cost of their care.
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premium
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A fixed amount your client has to pay monthly to participate in a plan or program; in private insurance, the price your client pays monthly for a policy.
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prescription drug plan (PDP)
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In Part D, a stand-alone insurance policy that helps with the cost of prescription drugs.
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preventive care
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Care that is meant to keep your client healthy, or to find illness early, when treatment is most effective. Examples of preventive care are flu shots, screening mammograms, and diabetes screenings.
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Pre-existing Condition
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A health problem a member had before the date that a new insurance policy starts.
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Private Fee-For-Service Plan (PFFS)
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In Part C, a type of Medicare Advantage plan in which there is usually no network of providers and your client may visit any Medicare-eligible provider who is willing to accept plans, payments, and conditions.
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service area
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In Part C and Part D, the area where a Medicare Advantage plan or a Prescription Drug Plan offers service. A service area is typically a county, state, or region.
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skilled nursing care
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Nursing care which should be provided only by a licensed nurse.
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Special Needs Plan (SNP)
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A type of Medicare Advantage plan that serves people with special health care needs.
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State Health Insurance Assistance Program
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A state program that gets money from the Federal government to give free local health insurance counseling to people with Medicare.
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State Insurance Department
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A state agency that regulates insurance and can provide information about Medigap policies and other private insurance.
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step therapy
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In Part D, a special procedure your clients and their doctors must follow before your client can use certain drugs. Your client must first try a less-expensive drug to see if it works. Your client may “step up” to a more expensive drug that treats the same condition only if your client and their doctor can show that the less-expensive drug didn’t work for your client.
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