20 Terms Seniors With Medicare Coverage Need To Understand

By Author: Georges Baxter
Total Articles: 15
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One of the most difficult parts of having Medicare is being able to understand the terminology.

“Words like coinsurance and copayment very often confuse the uninitiated,” notes Alan Weinstock, an insurance broker at MedicareSupplementPlans.com. “Medicare beneficiaries could miss out on receiving the proper care if they don’t understand their benefit period or covered services.”

With that in mind, here are 20 commonly used Medicare insurance terms and short phrases along with their definitions.

Assignment

An assignment occurs when a physician or medical supplier agrees to accept the Medicare-approved amount as full payment for services or supplies rendered. Since in most instances Medicare pays only 80% and the Medicare beneficiary covers the other 20% for services and supplies, an assignment can provide substantial savings.

Benefit Period

The benefit period is the period of time during which the benefit is paid. In the case of Medicare it begins the day an insured is admitted to a hospital or skilled nursing facility and ends when the insured has not received any care for ...
... 60 days in a row. If the Medicare beneficiary is hospitalized after that, a new benefit period begins.

Coinsurance

Coinsurance means you share a portion or percentage of the cost for services. So if Medicare covers 80% of the cost for a procedure, your coinsurance would be the remaining 20%.

Contracting Hospital

A contracting hospital is one that has agreed to render services under your insurance plan. As opposed to a non-contracting hospital which has not signed a contract or agreed to provide services for insurance policy members. See “Network” below.

Copayment

This term is sometimes confused with coinsurance. However, while coinsurance is generally a percentage of the total cost of services, copayment is a one-time flat fee (i.e. $20) to see a care giver.

Covered Services

These are the medically necessary services or supplies which are listed as part of your Summary of Benefits. They are the benefits you are entitled to receive.

Deductible

The amount you pay first before Medicare begins paying for any covered services. So if you have a $500 deductible and need $2500 in covered services, you will be required to pay your portion before Medicare pays the rest.

Excess Charge

The difference between the Medicare-approved amount and what the health care professional charges, if the actual charge is more than the Medicare-approved amount.

Limiting Charge

The limiting charge is the maximum amount that most non-participating providers are allowed to charge for services to a Medicare beneficiary. It is currently set at 115% of the Medicare allowed amount for services.

Medicare Carrier

Medicare carrier refers to an insurance company that is under contract with the federal government to provide Medicare insurance coverage.

Medically Necessary

Medicare typically defines medical necessity as “services or supplies that are needed for the diagnosis or treatment of your medical condition which meet the standards of good medical practice in the local area and aren’t mainly for the convenience of you or your doctor.”

Network/In-network

Term used to describe services received from doctors, hospitals and other health care providers who have a contract to provide services through your insurance carrier.

Non-Network/Out-of-network

Term used to describe services received from doctors, hospitals and other health care providers who DO NOT have a contract to provide services through your insurance carrier. Using a non-contracted or out-of-network provider generally costs you significantly more.

Out-of-pocket Maximum

The most you pay for covered expenses during the year before your plan begins paying 100% of covered expenses.

Primary Care Physician (PCP)

Your primary doctor is usually a general or family practitioner or internist. Your PCP is responsible for authorizing, coordinating and controlling the delivery of your covered services.

Prior Authorization

This refers to the pre-approval that many insurance companies require before you can receive services from a specialist.

Referral

The request for services Medicare beneficiaries receive for specialty services once they have been given authorization.

Service Area

This is the area within which you generally must obtain your medical services. If you are absent from your service area for a period of time (usually six months or less), it is considered a temporary absence.

Summary of Benefits

The Summary of Benefits provides Medicare beneficiaries with key features of their Medicare insurance plan, including monthly premiums and any deductibles and copayments.

Usual, Customary and Reasonable Charges (UCR)

This is the usual fee charged for a particular procedure. Only the usual and customary allowances are applied to your deductible and out-of-pocket maximum.

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