There are various terminologies associated with Medicare. To gain full knowledge about your Medicare plan, it is important to understand what these terms mean. In this guide, we’ll explain the top five Medicare terms you should know.
When you enroll in a Medicare plan, Medicare covers most of the medical expenses while you have to cover the remaining costs. The coinsurance refers to the percentage of costs you are to cover for each healthcare service. For Medicare Part A, there is a coinsurance for inpatient facility care and skilled nursing facility care. Upon admission to a hospital, you will pay a daily coinsurance from the 61st day to the 90th day.
For Medicare Part B, beneficiaries will pay a 20% coinsurance of the approved amount for outpatient services and durable medical equipment.
A deductible refers to the amount you have to cover out of pocket before Medicare starts to cover your health expenses. Both Part A and Part B have their deductibles. For Medicare Part A, you must meet the $1,484 deductible per benefit period before Part A begins to cover the approved services.
Unlike Part A, the Part B deductible is only once per year. This means once you meet the Part B deductible ($203 in 2021), you will only have to cover 20% of the approved amount for most Medicare Part B services.
Some Medicare Supplement plans may help to cover the deductibles from Original Medicare.
The premium refers to a fixed amount you pay monthly to stay enrolled in the plan. Most people do not have to pay premiums for Part A if they have paid 40 quarters of Medicare taxes. People who have less than 40 quarters will pay a premium for Part A. These premiums can be $259 up to $471, as of 2021. The monthly premium for Part B is about $148.50. However, if your income is high, then you will have to pay more. Part C can have premiums as low as $0 but have an average monthly premium of $21. Part D plans also have an average monthly premium of $30.50.
4) Medical Underwriting
Medical underwriting applies to Medicare Supplement plans. Medical underwriting refers to the process in which the insurer considers the applicant’s health condition when processing their Medigap enrollment. The insurer will ask questions pertaining to your health history and current health status. This is used to determine if your application will be accepted and how much the insurer will charge you for the policy. To avoid the underwriting process, ensure you enroll during the Medigap Open Enrollment period. During this period, you have a guaranteed issue right.
5) Part D Formulary
If you’re enrolled in a Part D plan, the way to know which drugs are covered is to check the formulary. The Part D formulary refers to the list of prescription drugs covered in the Part D plan. In the formulary, drugs are categorized into tiers. However, there are drugs that must be covered in each formulary.
To learn more about Medicare plans, reach out to us at Wise Up Financial.