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Here are five terms every Medicare beneficiary should know

Top 5 Terms Every Medicare Beneficiary Should Know

One of the most important things that anyone new to Medicare should do is learn some of the Medicare terminologies. Understanding these terms will go a long way in helping you navigate through your Medicare benefits. To help you understand this complicated federal health insurance program, here are the top 5 Medicare terms every new Medicare beneficiary should know.

Premiums

Medicare premiums are monthly charges that Medicare beneficiaries must pay in order to continue receiving coverage and keep their plan. Each part of Medicare has its own premium.

Part A can be premium-free, but those who do not qualify will have to pay between $259 to $471 each month. The Part B premium is $148.50 but can be higher if you make a higher income. The average Part C premium is $21, and the average Part D premium is around $30.

Keep in mind that premiums are subject to change each year.

Cost-Sharing

Cost-sharing is the amount of the total cost that a Medicare beneficiary pays for health care and/or prescription drug plans. Cost-sharing can include deductibles, copayments, coinsurances, and other similar charges. In some cases, cost-sharing depends on whether a Medicare beneficiary is on a plan’s network or out of the network (for Medicare Part C plans) or the beneficiary is using a preferred or standard network pharmacy for prescription drug plans.

High-Deductible Plan

The deductible must be paid by the Medicare beneficiary before Medicare approves any policy payments. High deductible plans are a relatively new approach to health insurance coverage, but they are becoming more popular among Medicare beneficiaries. Also, keep in mind that the amount of deductible you have to pay may change yearly

A high deductible is a type of health plan that is more affordable in terms of monthly premiums than traditional health plans. But as the name suggests, they have higher deductibles than traditional insurance plans, and you’ll need to pay your annual deductible before your Medicare plan starts to pay its share of your health expenses.

Part D Coverage Gap

Part D coverage gap (also known as donut hole) is a gap inside of all Medicare Part D plans that happens when a Medicare beneficiary goes beyond the initial prescription drug coverage limit. When this happens, you will be responsible for more of the prescription drug cost until your expenses reach the threshold for the coverage gap.

When you reach this threshold, your cost of a prescription drug can then be higher than they were before you reach the coverage gap. However, depending on what a member paid during the original coverage stage, they can have a lower coinsurance during the donut hole.

Part D Tiers

Part D tiers are an attempt to group drugs within a list (known as a drug formulary). Each Medicare Part D prescription drug provider can organize their tiers in distinctive ways. Usually, medications at the lowest level cost less than those at the highest.

Tier 1 prescription drugs typically don’t require preauthorization, while higher tiers like specialty drugs may require approval from your health insurance. When your doctor prescribes a medication, your Part D plan provider will inform the pharmacy of the tier you choose, and then the pharmacy will charge you the appropriate copayment.

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Need more information about Medicare or want to learn what can help you transition into Medicare easier? Contact Cornerstone Senior Advisors today.