Medicare insurance can be overwhelming for many reasons. One of them is the terminology. Insurance before Medicare can be relatively simple with terms like HMO and PPO. There are parts, plans, different enrollment periods, donut holes, and more with Medicare. Before you enroll in Medicare, there are basic terms that you should know as you learn more about Medicare.

Medicare Parts

The most important thing to know about Medicare is that Medicare has two parts that the federal government provides. There is Part A and Part B, and the coverage is the same for every Medicare-eligible beneficiary. These two parts make up your Original Medicare coverage.

Part A

The first term is Medicare Part A which is your inpatient hospital coverage. Part A will cover your hospital room and board in a semi-private room, three daily meals, skilled nursing care, hospice, and some labs and medications while in the hospital. You’d pay $0 per month for Part A if you worked at least 40 quarters in the United States. However, you can have a premium if you have worked fewer quarters. Additionally, there is a $1,556 deductible in 2022.

Part B

Medicare Part B is your outpatient medical coverage. Your doctor visits, physical therapy, preventive services, surgeries, durable medical equipment, and others will fall under Part B. There is an annual deductible of $233 in 2022. Once you have met that amount, Medicare covers 80% of the cost for those services, and you pay the remaining 20% with no cap or limit.

Part C

Part C is optional and is also known as Medicare Advantage Plans. Private insurance companies sell these plans. When you enroll in a Medicare Advantage plan, you receive your Medicare Parts A and B through the Advantage plan. Medicare pays the Advantage plan carriers a certain amount per month to manage your care. You still receive the same benefits from the Advantage plan, but they have set copays for each service.

This can be a great alternative as they provide a maximum out-of-pocket limit. Many of these plans are HMO or PPO plans, so they work like employer coverage. Some of these plans can also include drug coverage.

Part D

Part D is known as the prescription drug coverage. Original Medicare A and B do not cover most retail prescription drugs that you pick up from the pharmacy. Therefore, the Part D program was created. Plans will vary with each state, but they all have the same structure. One term, in particular, you should know is the Donut Hole.

Donut Hole

The Donut Hole is a stage in all Part D drug plans and Advantage plans that offer drug coverage. Once you and your plan pay $4,430 toward your drugs, you enter this stage. You will start paying 25% of the cost of your prescriptions. Once you reach $7,050, you exit the Donut Hole.

This stage can be pretty expensive for many beneficiaries, especially if they have costly drugs.

Medicare Supplement

Another term you need to know is Medicare Supplement, also known as Medigap. You can purchase these secondary plans to help with your costs after your Original Medicare. They are strictly secondary plans, so they will only cover what Medicare covers. You would purchase these plans from a private insurance company. However, there are ten different Supplement plans to choose from.

An example of a Supplement plan is Plan G. Plan G is one of the most popular Supplement plans. It helps cover your Part A deductible and costs and the 20% coinsurance after Part B.

Medically Necessary

When it comes to Medicare coverage, the term medically necessary is key. Medicare should cover any medically necessary service as long as it is needed to treat, diagnose, or monitor a health condition. Therefore, any cosmetic or routine services not covered by Medicare. An example of a routine service would be dental cleanings. It is essential to know that each service has a code, and that code needs to fit whatever procedure or service. The correct code helps Medicare approve or deny the claim.

Summary

There are more terms than the ones stated above that are important to know. However, these are a great place to start! These terms make up the very basics of Medicare.