Roll up your sleeves – choosing a Medicare plan is a big job.
Whether you are enrolling in Medicare for the first time or you have been a Medicare subscriber for years and are considering your care options, choosing a new plan can feel like a daunting task. This series is intended to make navigating that process a little easier by:
- Reviewing some important terms (part 1).
- Offering general guidance in selecting a plan that fits your needs (part 2).
- Introducing you to PEBB’s resources that can help (part 3).
What terms should I know?
These terms are referenced in PEBB’s materials and are helpful to know. You can also find others on this Glossary of Health Coverage and Medical Terms.
Benefits and coverage
Certificate of Coverage (COC): Also known as evidence of coverage (EOC) or a benefits booklet. Outlines the services and products covered by a plan, as well as the costs. The COC serves as a contract between you and the plan and is the most thorough resource when considering a plan. COCs and EOCs can be found at the links provided below.
- PEBB retiree benefits and coverage materials
- PEBB employee and continuation coverage benefits and coverage materials
- SEBB employee and continuation coverage benefits and coverage materials
Formulary: The list of prescription drugs a medical plan will cover. See What's the deal with pharmacy tiers? for more information.
Costs
Coinsurance: The percentage of a provider's cost (%) you will need to pay for a service or product. Your insurance will cover the rest of the cost, up to an allowed amount.
Coinsurances are displayed as percentages. Coinsurance differs from a copay in that your cost is not a fixed amount, but a percentage of the cost charged by the provider. See the example below for further explanation.
Copay: A set dollar amount ($) of the provider's cost that you will need to pay for a service or product. Your insurance will cover the rest of the cost, up to an allowed amount.
Copays are displayed as dollar amounts. A copay differs from coinsurance in that it is a set amount. See the example below for further explanation.
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Example: Imagine you have a health plan where a trip to the emergency room has both a copay of $75, and a coinsurance of 15 percent. If the cost for your emergency room visit is $200, you will pay $75, plus 15 percent of the $200 cost, which is $30. Altogether, you would pay $105, and your insurance will cover the remaining portion of the $200.
Deductible: The minimum you are required to pay per year, out-of-pocket, before your insurance begins to cover costs for your health care. The exception is certain kinds of care, such as preventive care, which may be covered prior to meeting your deductible.
Donut-hole: This phrase refers to costs you might be expected to pay if you reach the maximum cost limit on a Part D plan for prescription drugs. For instance, if a plan allows up to $10,000 per year to cover prescription drug costs, the member is responsible for a higher percentage of costs above $10,000 for the rest of the year or until the maximum out-of-pocket cost for the year is met. Certain PEBB Medicare plans provide full coverage in the “donut hole.”
Out-of-pocket costs: The out-of-pocket limit is the most you can expect to pay for services for the year. Out-of-pocket costs include meeting your deductible and any copays or coinsurance.
Types of plans
Health maintenance organization (HMO): This type of health insurance plan usually limits your care to providers who work for or contract with the HMO. It generally won't cover out-of-network care, except in an emergency.
Managed-care plan (MC): A managed-care plan has its own network of care providers. Members will receive care from a primary care provider within the network, and the primary care provider will refer you to specialists within the network. Out-of-network care is generally not covered, except in an emergency.
Medicare Advantage (MA/MAPD): Medicare Advantage plans, also known as Part C, are Medicare-approved plans offered by private companies. Like original Medicare (see definition below), Medicare Advantage plans provide “bundled” Part A and Part B coverage, and many also provide Part D. When drug coverage is included, PEBB calls it Medicare Advantage Prescription Drug (MAPD).
These plans are either managed care or preferred provider organization (PPO) plans.
Original Medicare: Original Medicare is made up of two parts: Part A (hospital care) and Part B (doctor visits, outpatient care, home health care, and medical equipment, such as walkers). Original Medicare works with all the PEBB Medicare plans. Many providers accept original Medicare.
Preferred provider organization (PPO): A PPO shares similarities with an HMO, as both have in-network care providers. But unlike HMOs, PPOs provide flexibility to see in-network or out-of-network providers. Typically, you pay more for out-of-network providers. Additionally, you do not need to select a primary care provider and do not need a referral to see a specialist.
To learn more about selecting a Medicare plan, see the other parts of this series: