Posted on January 6, 2022 by Kyle Walton
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Posted on January 6, 2022 by Kyle Walton
The world of Medicare health insurance can often feel quite large and overwhelming, especially when it comes to understanding the health insurance terms (and their health insurance definitions) that are used regularly by insurance companies and healthcare providers.
At MedicareInsurance.com, helping seniors, their caregivers, and their families truly understand the ins and outs of their health insurance is a high priority goal. That’s why we’ve put together this brief list of some of the most common health insurance definitions as well as a brief description of the scenarios in which you are likely to encounter them.
A co-payment, also known as a co-pay, is a very common healthcare term. In a Medicare sense, this term usually refers to an amount you may be required to pay out-of-pocket as your share of the cost of a specific medical service. Medical services that may require a co-pay include doctor’s visits, hospital outpatient visits, or prescription drug acquisition.
A copayment is usually a set amount that is made aware to you ahead of time in accordance with your Medicare plan benefits. For example, you may pay $10 or $20 for a doctor’s appointment or prescription drug pickup.
Some Medicare Advantage plans have copayments that may be as low as $0. It all depends on the exact type of plan you decide to enroll in.
Similar to a copay, co-insurance refers to an amount you may be required to pay as your share of the cost of certain medical services, but this is typically after you pay any deductibles. This means that if you have a plan that includes co-insurance you must pay this amount in addition to any deductibles you owe.
Co-insurance usually takes the form of a fixed percentage amount, such as 10 percent or 20 percent of medical service costs. Your Medicare plan is responsible for paying the remainder of the allowed amount after you have paid your share in the form of co-insurance.
A deductible is the amount you owe for healthcare services before your Medicare plan steps in to pay. For example, if your Medicare plan carries a deductible of $1,000, your plan will not be required to pay for any medical costs (usually including prescription drug costs) until they exceed $1,000.
Not all healthcare services may be subject to your plan’s deductible, so it’s important to research ahead of time what services do and do not apply. More advanced and comprehensive plans typically offer lower deductibles.
Durable Medical Equipment, often shortened to DME, refers to certain medical equipment that is ordered by your doctor for personal use. Primarily, this includes tools such as walkers, wheelchairs, or hospital beds, but may also include oxygen equipment, crutches, or certain diabetes supplies.
The cost of Durable Medical Equipment is usually covered under Original Medicare Part B, the outpatient medical insurance portion of Medicare.
Health Maintenance Organizations, usually referred to simply as HMOs, are currently the most popular type of health insurance plan. The use of the words “health maintenance” refers to the emphasis these types of plans place on prevention and wellness.
In an HMO plan, beneficiaries must see a primary care physician who then refers the beneficiary to a specialist in accordance with whatever healthcare services the beneficiary requires.
HMO beneficiaries are required to see specialists and primary care physicians who are considered in-network providers in order to receive coverage for the services they receive.
Typically, Original Medicare will only cover healthcare services that are considered by a doctor to be “medically necessary.” Medically necessary healthcare services usually include supplies, treatments, and appointments needed in order to diagnose or address a specific illness, injury, condition, disability, or disease.
The term network refers to the full list of doctors, hospitals, healthcare facilities, and sometimes pharmaceuticals that are previously approved for coverage under a given Medicare plan.
If a medical professional or healthcare provider is “in-network” it means that that medical professional or provider has a contract with your Medicare Plan to provide healthcare services. As such, any medically necessary treatment received by an in-network provider will typically be covered by your Medicare plan.
If a given healthcare provider is “out-of-network,” this means that that provider is not currently contracted to provide healthcare services under your Medicare plan. You may be required to pay most or all of the costs of the care you receive from an out-of-network provider.
A Preferred Provider Organization, often simply referred to as a PPO plan, is designed to give beneficiaries more diversity in their choice of healthcare providers. Under a PPO plan, beneficiaries may see a specialist directly without referral from a primary care physician.
Though PPO plans are more expensive than their HMO counterparts, they are usually ideal for those who prefer to see specialists directly and wish to maintain greater control over their doctors and Medicare benefits.
One of the most important terms to understand in the world of Medicare and health insurance in general, a premium refers to the periodic payment that is made to Medicare, an insurance company, or a healthcare plan that provides insurance coverage.
Essentially, a premium is the amount you must pay in order to continue receiving health insurance coverage under a given plan. You and/or your employer will usually pay premiums on a monthly, quarterly, or yearly basis.
Skilled nursing care refers to services that are provided to patients by a licensed nurse, nurse practitioner, therapists, or technicians. These services may be received in a hospital setting, long-term care facility, nursing home, or even in your very own home.
It is important to note that skilled nursing services are medically-focused. They do not include custodial services such as assistance with dressing, housekeeping, personal hygiene, eating, or bathing.
Many (but not all) Medicare plans provide at least partial coverage for the receipt of skilled nursing care.
Though our goal with this health insurance glossary is to shed more light on many common health insurance definitions, this is by no means a complete list.
To learn more about your specific Medicare options or for a more detailed explanation on some of the terms and language you may encounter along the way, don’t hesitate to contact the licensed insurance agents and friendly Medicare experts at MedicareInsurance.com today!