When you reach retirement, or the age of eligibility for Medicare, you’ll face a number of changes in your insurance needs. If you are someone who is new to Medicare, it is essential that you get familiar with some of the more commonly used terms, so that you can make decisions that are appropriate for your health and financial situation.
Some of these commonly used terms are as follows:
Advance Beneficiary Notice: A notice that is given to a Medicare beneficiary by a hospital, doctor, or other provider prior to providing a particular item or service that the provider believes Medicare may not cover. If a beneficiary is not given an ABN prior to receiving the service or item and Medicare does deny payment, the beneficiary may not be required to pay for it. If, however, the beneficiary is given the notice and signs it before Medicare denies payment, that beneficiary will likely have to pay for that item or service.
Advance Directive: A written document prepared by a beneficiary stating how he or she wishes medical decisions to be made in the event that he or she loses the ability to make those decisions. It often includes a living will and a durable power of attorney for health care.
Appeal: This is action that can be taken if a beneficiary disagrees with a decision regarding coverage or payment that has been made by Medicare or any related Medicare plan. An appeal can be filed if Medicare or a Medicare plan denies one of the following:
- a request for a prescription or health-care supply or service the beneficiary believes he or she should get
- a request for a Medicare payment for a prescription drug or health-care service already received
- a request to modify a prescription drug payment amount
Hospital Insurance Protection: Often referred to as Medicare Part A, this form of coverage is designed to cover expenses related to post-hospital care, inpatient hospital care, and hospice care benefits. It is funded primarily by Social Security payroll tax deductions.
Medical Insurance Protection: Often referred to as Medicare Part B, this is a voluntary program that is designed to cover the health-care expenses not covered by Part A, including outpatient care, medical equipment, ambulance costs, doctor’s services, and physical therapy. This program is financed by both federal contribution and premiums paid by beneficiaries.
Medicare Advantage: Often referred to as Medicare Part C, this coverage plan allows beneficiaries to choose between benefits offered by the Medicare Program or the Medicare Advantage Plan, which includes PPOs or HMOs.
Open Enrollment Period: The specific date range during which applications are accepted from applicants aged 65 years or older. During this period, the applicants are also able to select the Medicare supplement insurance they wish to have in addition to their primary Medicare coverage.
Part D Coverage Determination: The initial decision made by a beneficiary’s Medicare drug plan regarding his or her eligibility, which includes:
- whether or not a certain drug will be covered by Medicare
- whether the beneficiary meets any necessary requirements for receiving a requested medication
- how much the beneficiary will have to pay for medications
- if any exceptions to the Medicare plan rules will be granted
Coverage Gap: The period of time during which a beneficiary will be required to pay a higher prescription drug cost until enough has been spent for that beneficiary to quality for catastrophic coverage.
Custodial Care: Non-skilled personal care that is provided to an individual. Includes help with daily activities such as eating, dressing, bathing, mobility concerns, and basic health-care tasks such as the use of eye drops. In most situations, Medicare will not pay for custodial care.
Exception: A specific type of Medicare decision regarding prescription drug coverage. It is usually a ruling on whether or not Medicare will cover a medication that is not on its current list of covered drugs, but sometimes an exception will be used to overrule a specific Medicare policy or rule. Requests for an exception must be accompanied by a note from a doctor or from another eligible health-care provider; the note must outline the medical reasons behind the exception request.
Guaranteed Issue Rights: Also referred to as Medigap protections, these are rights that apply to situations requiring insurance companies to offer beneficiaries a Medigap policy that is not restricted by a past or present health condition. In other words, it prevents insurance companies from denying coverage based on preexisting health conditions.