Every Medicare Advantage plan has a Summary of Benefits (SB). It answers the question, “Is this plan for me?”
The SB includes the plan’s medical costs and procedures and a list of extra benefits. Most Medicare Advantage plans include prescription medications. The abbreviation for Medicare Advantage plans is MA. If the plan includes prescription drug coverage, the abbreviation is MAPD.
A premium is what you pay each month to stay in business with the plan. Medicare Advantage plans have low premiums. Sometimes, there is no premium. People often confuse the Medicare Advantage plan premium with the Part B premium. The Part B premium is part of Original Medicare. Whether you have a Medicare Advantage plan, or whether you do not, you are responsible for the Part B premium. Some exceptions apply.
A copay is a dollar amount. Example: It costs $40 to see a specialist and $47 for a month’s supply of a brand name medication.
Coinsurance is a percentage of what the medical service or procedure costs. Example: There’s a 20% charge for durable medical equipment and a 50% charge for a dental procedure.
A deductible is a fixed dollar amount that you pay before the benefits of the plan begin. Example: If your plan has a pharmaceutical deductible for brand name medications, you pay the deductible before the copay amount or coinsurance percentage comes into play.
Your out of pocket maximum (MOOP) is the most amount of money you will spend on medical costs each year. Let’s say your plan’s MOOP is $1,400. If you should spend a combined $1,400 on doctor visits, outpatient surgery, the emergency room, inpatient hospitalization, and other medical services, the insurance company will pay 100% of these costs for the rest of the year. Every Medicare Advantage plan has a MOOP. Your MOOP does not include your plan premium (if there is one), prescription costs, and allowances for extra benefits such as dental, vision and hearing.
Your provider administers Part B medications. This could be in a doctor’s office, a dialysis center, or an outpatient surgery center. An example of a Part B drug is a cortisone injection for your knee or shoulder. Part B medication cost is typically a coinsurance percentage.
You pick up Part D (prescription) medications at the pharmacy. Medications are placed on levels or tiers. Medicare Advantage plans have five or six tiers. The least expensive medications (called ‘generics’) are on tiers 1 and 2. Brand name medications (and some generics) are on tiers 3 and 4. Speciality medications are on tier 5. Tier 6 is typically reserved for medications that treat high blood pressure, diabeties and cholesterol.
Your plan’s medications are listed in a formulary, also known as a drug list. If your medications are not found on your plan’s formulary, you will pay full price. Before enrolling in a plan, make sure your drugs are covered. You can acccess your plan’s formulary online (the insurance company’s website) and you can get a hard copy by contacting the insurance company directly.
Durable Medical Equipment (DME) helps you complete daily activities of living. It includes such items as walkers, wheelchairs, and oxygen tanks. ‘Durable’ means the equipment is able to withstand repeated use. But there are exceptions. Catheters, which are typically used once, are also considered DME. Your cost is typically 20% but may be less for some DME. Check with your plan.
*This site is not affiliated with or endorsed by any government agency.
If there are terms in your Summary of Benefits you don’t understand, call 725-227-6795 or email ken@deserthealthandlife.com. You can also fill out a contact form on this website. I am a licensed insurance broker.
