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 procedures, their cost, 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 no or low premiums. Sometimes, people confuse the plan premium with the Part B premium. The Part B premium comes from the federal government. Whether you have a Medicare Advantage plan, or whether you do not, you are responsible for the Part B premium.
A deductible is a fixed dollar amount that you pay before the benefits of the plan begin. For example, if your plan has a pharmaceutical deductible for certain medications, you pay the deductible before the copay or coinsurance amount comes into play. Some Medicare plans have a medical deductible.
Your out of pocket maximum (MOOP) is the most amount of money you will spend on medical expenses before the plan pays 100% of the cost. Let’s say your plan’s MOOP is $999. If you should spend $999 on costs such as doctor visits, outpatient surgery, the emergency room and inpatient hospitalization, the insurance company will cover 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), your prescription costs, and allowances for extra benefits such as dental, vision and hearing.
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.
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 into your knee or shoulder. Part B medication cost is typically a coinsurance amount.
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 and will tell you what tiers they fall on. If they are not listed in the formulary, you will pay full price. You can find your medications on the insurance company’s website or get a hard copy by contacting the insurance company.
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.
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If there are terms in your Summary of Benefits you don’t understand, call 725-227-6795 or email [email protected]. You can also fill out a contact form on this website. I am a licensed insurance broker.
