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Glossary of Medicare and Medicare Advantage Terms

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Glossary of Medicare and Medicare Advantage Terms

Medicare Advantage Terms and What They Mean

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Annual Deductible

The amount you must pay for your healthcare or prescription drugs before Original Medicare, your prescription drug plan, your Medicare Advantage plan, or your other insurance begins to pay.

Annual Election Period (AEP)

Medicare sets aside this period for enrollment in Medicare Advantage (MA) and Medicare Prescription Drug Plans (PDP). From October 15th to December 7th you have the opportunity to enroll in an MA or PDP plan, switch from your current plan or return to Original Medicare for coverage effective on January 1 of the following year.

Annual Premium

The amount you pay every year for your Medicare Advantage plan.

Appeal

An appeal is something you do if you disagree with a decision to deny a request for healthcare services or prescription drugs or payment for services or drugs you already received. You may also make an appeal if you disagree with a decision to stop services that you are receiving. For example, you may ask for an appeal if our plan doesn't pay for a drug, item, or service you think you should be able to receive.

Authorization

The process of obtaining approval from the health plan or health insurance company to ensure that it will pay for the services you want or need to receive.

Automatic Bank Withdraw

A way to pay your monthly premium by allowing your plan to automatically withdraw money from your bank account. If you decide to switch to Automatic Bank Withdraw or move from Automatic Bank Withdraw to a monthly premium bill, it could take up to three months for it to take effect and you are responsible for paying those premiums during that time.

Catastrophic Coverage

The stage of Medicare Prescription Drug Coverage where you pay a low copayment or coinsurance for your drugs.

Centers for Medicare & Medicaid Services (CMS)

The federal agency that runs the Medicare program.

Claim

A formal request to the health plan asking for payment for services you received.

Coinsurance

A percentage of the cost you pay when your plan does not cover 100% of the cost. For example, a plan may cover 80% of the cost of your medicine or your hospital visit; the other 20% is your coinsurance.

Copay/Copayment

A dollar amount or percentage that you pay when your plan does not cover 100% of the cost of your medicines or your medical care. For example, if you pay a certain pre-determined amount for a medicine, or for a visit to the doctor, that amount is your copay.

Coverage Gap

The third stage of Medicare Prescription Drug Coverage (following the Initial Coverage stage). For 2013, you reach the Coverage Gap after the total annual drug costs paid by you and your plan have reached $2,970 not counting your premium payments. In the Coverage Gap, you are responsible for paying 79% of generic drug costs and 47.5% of the cost of brand-name drugs until you have paid $4,750 in true out-of-pocket costs. Note: these dollar limits are subject to change each year.

Creditable Prescription Drug Coverage

Prescription drug coverage that is at least as good as Medicare Prescription Drug Coverage. If you go without Creditable Prescription Drug Coverage for a period of 63 consecutive days or longer you may have to pay a Late Enrollment Penalty.

Deductible

A dollar amount that you may be required to pay out-of-pocket before your plan begins to provide coverage for healthcare costs that are covered by the plan.

Disenroll

A request to end your healthcare coverage with a health plan.

Durable Medical Equipment (DME)

Medically necessary healthcare equipment prescribed by a healthcare provider to be used by a member in the home, such as hospital beds and wheelchairs.

End-Stage Renal Disease (ESRD)

Permanent kidney failure requiring kidney dialysis or a transplant.

Evidence of Coverage

A document you receive each year from your health plan that gives you information about what benefits the plan will cover, how much you pay, and more.

Exception

A type of coverage decision that, if approved, allows you to get a drug that is not on the Medicare Advantage Prescription Drug plans formulary (a formulary exception), or get a non-preferred drug at the preferred cost-sharing level (a tiering exception). You may also request an exception if your plan requires you to try another drug before receiving the drug you are requesting, or the plan limits the quantity or dosage of the drug you are requesting (a formulary exception).

Explanation of Benefits (EOB)

A statement you receive for each month you use your Medicare Advantage or Medicare Advantage Prescription Drug Plan benefits. This statement is from your plan and provides complete information about the health or prescription drug services you've received, payments made, and any costs you are responsible for paying. It is important to remember that the EOB is not a bill. This information is only provided for your convenience.

Extra Help

The program run by the Social Security Administration that helps with the costs of Medicare Prescription Drug Coverage (Part D). If you qualify, Social Security will enroll you in the program. The amount of assistance you receive will depend on your financial situation and income.

Formulary

A list of generic and brand-name prescription drugs that are covered by a Medicare Advantage Prescription Drug plan.

Generic Drug

Generic drugs 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.

Grievance

A formal complaint about how a Medicare Advantage or Medicare Prescription Drug plan is providing your care. If you want to request coverage for a prescription drug or service, you should request a coverage determination instead of filing a grievance.

Health Insurance Portability and Accountability Act (HIPAA)

HIPAA is the acronym for the Health Insurance Portability and Accountability Act that was passed by Congress in 1996. HIPAA does the following:

  • Provides the ability to transfer and continue health insurance coverage for millions of American workers and their families when they change or lose their jobs;
  • Reduces healthcare fraud and abuse;
  • Mandates industry-wide standards for healthcare information on electronic billing and other processes; and
  • Requires the protection and confidential handling of protected health information.

Health Maintenance Organization (HMO)

Sometimes called "managed care organizations," HMOs contract with doctors and hospitals who agree to accept their payments. In an HMO, you receive your care from the doctors, hospitals, and other providers who contract with the HMO.

(Universal American's Medicare Advantage HMO plans operate under the names TexanPlus® HMO in Texas, Generations Healthcare HMO in Oklahoma, and Today's Options® HMO in Indiana.)

Initial Coverage

The first phase of Medicare Part D coverage that, depending on the plan, starts after you meet your yearly deductible for Part D.

Initial Coverage Election Period (ICEP)

The Initial Coverage Election Period (ICEP) is the period during which an individual newly eligible for a Medicare Advantage (MA) may make an initial enrollment request to enroll in an MA plan. This period begins three months immediately before the individual's first entitlement to both Medicare Part A and Part B and ends on the later of:

1. The last day of the month preceding entitlement to both Part A and Part B, or;

2. The last day of the individual’s Part B initial enrollment period.

The initial enrollment period for Part B is the seven (7) month period that begins 3 months before the month an individual meets the eligibility requirements for Part B, and ends 3 months after the month of eligibility.

Once an ICEP enrollment request is made and enrollment takes effect, the ICEP election has been used.

Initial Enrollment Period (IEP) for Part D

The period in which you are first eligible to enroll in a Medicare Prescription Drug plan (Part D). For most people, the Initial Enrollment Period begins three months before the month of your 65th birthday, during your birthday month, and up to three months after.

Late Enrollment Penalty (LEP)

The amount added to your monthly premium for Medicare Part B or Medicare Part D coverage if you did not enroll when you were first eligible and did not have other coverage.

Medicaid

A joint Federal and State program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state, but most healthcare costs are covered if you qualify for both Medicare and Medicaid.

Medicare

Medicare is a Federal health insurance program for people age 65 or older, under age 65 with certain disabilities, and any age with permanent kidney failure (called End-Stage Renal Disease).

Medicare Advantage

Medicare Advantage Plans are health plan options offered by private insurance companies that are approved by Medicare. If you join one of these plans, you generally get all of your Medicare-covered healthcare through that plan. Medicare Advantage Plans (called MA Plans) combine Part A (hospital insurance) and Part B (medical insurance) together in one plan, and they can also be combined with Part D prescription drug coverage (called MA-PD Plans).

Medicare Advantage Disenrollment Period

From January 1 through February 14, you may disenroll from a Medicare Advantage plan and return to Original Medicare. Requests to disenroll will be effective on the first day of the month following your disenrollment request.

Medicare Savings Programs (MSP)

People with Medicare who have limited income and resources may get help paying for their out-of-pocket medical expenses from their state Medicaid program. There are various benefits available to "dual eligibles" who are entitled to Medicare and are eligible for some type of Medicaid benefit. These benefits are sometimes also called "Medicare Savings Programs."

Network Private Fee-for-Service (PFFS)

Network PFFS plans are a type of Medicare Advantage plan that includes all Medicare Part A (hospital insurance) and Part B (medical insurance) benefits. These plans have a network of providers (that is, providers who have signed contracts with the plan) for all services covered under Original Medicare. These providers have already agreed to see members of the plan. If a provider is not one of the network providers, then the provider is not required to agree to accept the plan's terms and conditions of payment, and they may choose not to provide healthcare services to plan members, except in emergencies.

Network Provider

A doctor, hospital, or other healthcare provider that has agreed to be part of a plan's network. Members usually pay less for their care when they use a network provider, depending on the plan.

Out-of-Network

Doctors, hospitals, pharmacies, and other healthcare professionals or suppliers who do not belong to a health plan's provider network.

Out-of-Pocket Costs

Costs that you may pay for healthcare because they are not covered by your Medicare plan or other insurance.

Over-the-Counter Medicines

Medicines that do not require a prescription.

Medicare Part A (Hospital Insurance)

Provides coverage for inpatient hospital care, inpatient stays in most skilled nursing facilities, and hospice and home health services.

Medicare Part B (Medical Insurance)

Provides coverage for doctor and clinical lab services, outpatient and preventive care, screenings, surgical fees and supplies, and physical and occupational therapy.

Medicare Part C (Medicare Advantage Plans)

Medicare Advantage Plans are health plan options offered by private insurance companies that are approved by Medicare. If you join one of these plans, you generally get all of your Medicare-covered healthcare through that plan. Medicare Advantage Plans (called MA Plans) combine Part A (hospital insurance) and Part B (medical insurance) together in one plan, and they can also be combined with Part D prescription drug coverage (called MA-PD Plans).

Medicare Part D (Prescription Drug Coverage)

Medicare Prescription Drug Coverage available through either a Medicare-approved stand-alone Prescription Drug Plan or as coverage added to a Medicare Advantage plan (also called MA-PD plans).

Preferred Provider Organization (PPO)

PPO plans are a type of Medicare Advantage plan that includes all Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) benefits. These plans are designed to reduce the cost of healthcare by contracting with certain doctors, labs, and hospitals to provide care at a discounted rate for members. A PPO plan has a list of physicians and other providers that members may go to (called a "network"). However, members have the flexibility to go to any doctors, specialists, or hospitals that are not on the plan's list for similar or different costs, depending on the plan. Some plan options include the same costs for in and out-of-network benefits.

(Universal American's Medicare Advantage PPO plans operate under the name Today's Options® PPO in Arkansas, Georgia, Indiana, Iowa, Maine, Mississippi, Missouri, Montana, Nebraska, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Texas, Virginia, and Wisconsin.)

Premium

The amount an individual must pay to Medicare or a health insurance plan for medical coverage and/or prescription drug coverage. It is generally paid on a monthly basis.

Prescription Drug Plan (PDP)

A Medicare "Part D" Prescription Drug Plan (or PDP) can be a stand-alone plan (not joined with other insurance) or may be combined with a Medicare Advantage plan. A Medicare Advantage plan that includes prescription drug coverage is often referred to as an MA-PD plan.

Primary Care Physician (PCP)

A doctor that a member chooses who coordinates his/her healthcare with specialists and other providers. A PCP acts as the manager of your healthcare and can assist you in finding the right specialists when necessary. He or she is available to patients 24 hours a day, 7 days a week through regularly scheduled appointments or by other doctors providing "on-call" back up coverage. Most Health Maintenance Organization (HMO) plans require you to see your PCP before you see any other healthcare provider.

Prior Authorization

A plan requirement to get approval from the plan before you fill your prescriptions. If you don't get approval, the plan may not cover the drug.

Private Fee-for-Service (PFFS) Plans

PFFS plans are a type of Medicare Advantage plan that includes all Medicare Part A (hospital insurance) and Part B (medical insurance) benefits. These plans give members the freedom to choose any doctor or hospital that accepts Medicare and the plan's terms and conditions.

(Universal American's Medicare Advantage PFFS plans operate under the name Today's Options® PFFS in Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Carolina, North Dakota, Oklahoma, Texas, Vermont, Washington, and Wisconsin and Today's Options® Network PFFS in Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Maine, Mississippi, Missouri, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and Wisconsin.)

Quantity Limits

A limit to the amount of a particular medication a Medicare Advantage Prescription Drug plan or Medicare Prescription Drug plan will cover in a period of time.

Special Election Period (SEP)

Special Election Periods allow you to enroll into or change plans outside of Medicare's standard enrollment periods. For example, if you move out of your Medicare Advantage plan's service area, you have a Special Election Period to enroll in a plan that is available in your new location. If you move into, reside in, or move out of a nursing home you may also have a Special Election Period. If you have Medicare and Medicaid, you have a Special Election Period that allows you to change Part D drug plans at any time.

Special Needs Plan (SNP)

SNPs are types of Medicare Advantage Plans designed for people with certain chronic diseases and conditions or who have special needs (such as people with both Medicare and Medicaid, or people who live in certain institutions). SNPs provide members with all Medicare Part A (Hospital Insurance), Medicare Part B (Medical Insurance) services, and Medicare prescription drug coverage (Part D).

Specialist

A doctor who treats specific conditions or parts of the body.

Specialty Coinsurance

The percentage of the cost you pay for specialty prescriptions, such as injectable drugs and biopharmaceuticals.

Specialty Drugs

A Specialty tier drug is a very high cost or unique prescription drug which may require special handling and/or close monitoring. Specialty drugs typically treat complex, chronic conditions and are often injected.

State Pharmacy Assistance Program (SPAP)

A state program that provides assistance in paying for drug coverage, based on financial need, age, or medical condition and not based on current or former employment status. These programs are run and funded by the states.

Step Therapy

An optional plan requirement to first try certain drugs for treatment of a medical condition before a different drug will be covered for that same condition. For example, if Drug A and Drug B both treat your medical condition, the plan may not cover Drug B unless you try Drug A first. If Drug A does not work for you the plan will then cover Drug B.

Supplemental Security Income (SSI)

This benefit was designed to assist those who are aged, blind, or disabled and who have little or no income, with monetary benefits for basic needs such as food, clothing and shelter.

Tier

A system that Medicare Advantage Prescription Drug plans use to classify prescription drugs.

True Out-Of-Pocket (TrOOP) cost

A yearly calculation of what you have paid for Part D prescription drugs while on a Medicare Advantage Prescription Drug Plan, including any deductibles and copays. When your TrOOP costs reach a specific dollar amount you become eligible for catastrophic coverage, which allows you to get medicines at a lower cost.

Value-Added Services

Additional features available to you through your Medicare Advantage plan.

Disclaimer Information:

Medicare Complaint Form. For more information, visit Medicare.gov or Medicare's Ombudsman. (By clicking on these links you will be leaving our website).

You must continue to pay your Medicare Part B premium.

The benefit information provided is a brief summary, not a complete description of benefits. For more information contact the plan.
Limitations, copayments, and restrictions may apply.
Benefits, formulary, pharmacy network, premium and/or copayment/co-insurance may change on January 1 of each year.

Plan performance Star Ratings are assessed each year and may change from one year to the next.

This information is available for free in other languages. Please contact our customer service number at 1-866-249-8668, 8:00 a.m. to 8:00 p.m. in your local time zone (TTY users call 711) 7 days a week. This document may be available in other formats such as Braille, large print or other alternate formats. This document may be available in a non-English language. For additional information, call customer service at the phone number listed above.

Esta información está disponible sin cargo en otros idiomas. Para obtener más información, comuníquese con el Servicio de Atención al Cliente al número 1-866-249-8668, de 8:00 a.m. a 8:00 p.m. en su zona horaria local (los usuarios de TTY deben llamar al 711) los 7 días de la semana.

Este documento puede estar disponible en otros formatos, como Braille, letra grande o otros formatos alternativos. Este documento puede ser disponible en un idioma no inglés. Para obtener más información, llame al servicio al cliente en el número de teléfono que aparece arriba.

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