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. If your Medicare Advantage plan includes prescriptions, you will find their costs in your SB. Most Medicare plans include prescriptions but some do not. 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. The Part B premium is tied to Original Medicare. It is not the same as the Medicare Advantage plan premium. If your MA or MAPD plan has a premium, you pay this in addition to the Part B premium. If you don’t pay your Part B premium, you will be automatically disenrolled from your Medicare Advantage plan.
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: Suppose your plan has a $615 deductible for brand name medications. You pay full price of your brand name medication until you reach $615. Once your deductible is fulfilled, the coinsurance or copay amount for your medication 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 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, your 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. Specialty medications are on tier 5. Tier 6 is typically reserved for medications that treat high blood pressure, diabetes 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 access your plan’s formulary online (the insurance company’s website). You can get a hard copy by contacting the insurance company directly.
Durable Medical Equipment (DME). ‘Durable’ means the equipment is able to withstand repeated use. Some examples are wheelchairs, walkers, canes, and oxygen tanks. There are exceptions. Catheters, which are typically used once, are considered DME. Your cost is typically 20% of retail, but may be less on some Medicare Advantage plans.
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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.
