Every Medicare Advantage plan has a Summary of Benefits (SB). It helps answer the question, “Is this plan for me?”
The SB includes the plan’s medical procedures, what they 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 your insurance 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 drugs on certain tiers (see below), you pay the deductible before the copay or coinsurance amount comes into play. Some Medicare plans have medical and/or pharmaceutical deductibles. Other plans do not.
Your out of pocket maximum (MOOP) is the most amount of money you will spend on Part A and B expenses before the plan pays 100% of the cost. Let’s say your plan MOOP is $1,200. Part A and B expenses include things like inpatient hospitalization, skilled nursing facility costs, and outpatient medical treatment. If you should spend $1,200 on costs like these, your insurance company will pay these expenses for the rest of the year. Your MOOP does not include your plan premium (if there is one), your prescription costs, and allowances for most if not all extra benefits. Every Medicare Advantage plan has a MOOP.
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 item costs. Example: There’s a 20% charge for durable medical equipment and a 50% charge for a particular 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 medications are typically covered by a coinsurance amount.
You pick up Part D (prescription) medications at the pharmacy. What you pay for them depends on what level or tier they fall on. 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 (if your plan has one) are typically reserved for medications that treat high blood pressure, diabeties and high cholesterol. Part D medications are priced with a copay or coinsurance amount. Some medications are $0.
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. You can also get a hard copy of the formulary.
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 ken@deserthealthandlife.com. You can also fill out a contact form on this website. I am a licensed insurance broker.
