Medicare Supplement Glossary

Benefit Period: The Medicare system will measure the length of your use of the hospital and skilled nursing facility services and the benefit period will start on the day you’re admitted to a hospital or SNF. The benefit period will cease at the point when you haven’t received any skilled nursing care or inpatient hospital services for a total of sixty days in a row. After one benefit period has ended, a new one will begin if you go into a hospital or SNF. You’ll be responsible for paying an inpatient hospital deductible for each benefit period you use, but there is no limitation to the amount of benefit periods you can use.

Coinsurance: This is a type of cost sharing whereby you split medical expenses with the insurance carrier or Medicare itself. As an example, your Medicare Part B will pay approximately 80% of all expenses and you’ll be responsible for the remainder.

Copayment: This is another type of cost-sharing provision where you’ll be responsible for paying a fixed amount for each service you incur that is covered under your policy. Another term for this would be a co-pay as it’s commonly known in the health insurance industry.

Cost sharing: This is determined to be your share of the cost for any medical service and/or supply including the copay, coinsurance, deductibles, and any other included expenses.

Deductible: A form of cost sharing where you will pay a fixed dollar amount before Medicare begins to cover any Medicare-approved expenses.

End Stage Renal Disease: This is as bad as it sounds and is defined as irreversible kidney failure which requires dialysis and/or a kidney transplant.

Guaranteed Issue: This simply means that during the Initial Enrollment Period explained above, one has the option right to purchase any Texas-based Medicare supplement plan one chooses. During this time, the insurance carrier cannot decline you for coverage or increase your premium based on pre-existing medical conditions or due to a past medical issue.

Guaranteed Renewable: Federal law basically states that your Texas Medicare supplement policy cannot be canceled by your insurance company unless you make a material misrepresentation on the initial application or fail to pay your premiums in a timely manner, but of course, rates are subject to change over time. These rate increases (or decreases) apply to all insured of the same policy class who reside in your home state of Texas.

Medicaid: Medicaid is both a Federal and State of Texas program that assists with medical expenses for those with limited income, sometimes referred to as insurance for the poor. In Texas, most of your healthcare expenses will be covered if you simultaneously qualify for both Medicaid and Medicare.

Medical Underwriting: The procedure that the insurance carrier uses to determine, based on a person’s medical history, whether to accept or decline your application for coverage. It can also be used to determine whether to add a waiting period for certain pre-existing conditions and the premium to be charged for said coverage. Remember that during your Initial Enrollment Period, medical underwriting does not apply as your policy will be issued on a guaranteed issue basis.

Medicare: Medicare is a health insurance program aimed at those over age 65, those under age 65 with certain physical or mental disabilities, and those US citizens of all ages with either End Stage Renal Disease or amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease).

Annual Enrollment Period (AEP) for Medicare: Every year in between October 15th and December 7th, another open enrollment period exists when you can add, drop, or change your Medicare health insurance plans. This includes Medicare Advantage as well as Part D prescription drug plans. Some exceptions do exist, but this is normally the one and only period during a calendar year when you may choose a different Medicare Supplement Policy in Texas.

General Enrollment Period (GEP) for Medicare: If you missed enrolling in Medicare during either the Initial/Special Enrollment Period, the General Enrollment Period is a third opportunity to sign up for Medicare Part A and Medicare Part B. This extra chance lasts each year from January 1st until March 31st and when enrolled in Medicare during this period, the plan will become effective on July 1st of that same year.

Medicare Initial Enrollment Period: The 7-month period when you will become eligible for Medicare coverage. This will begin 3 months before the month when your 65th birthday occurs and will end 3 months after the month when your 65th birthday occurs.

Special Enrollment Period Medicare: In some specific situations, you may be able to still enroll in Medicare or possibly make changes to the existing Medicare coverage you have without any adverse effects. Some examples of a Special Enrollment Period are 1) You chose to not enroll in Medicare using the Initial Enrollment Period since either you or your spouse were still currently employed at that time or were covered under the employer group health insurance plan from said employer. In this instance, you’ll have 8 months after the date you cease working or the date your employer group health insurance ends. Keep in mind, though, that you can always enroll in Part B of Medicare any time prior to this to avoid a gap in your health coverage.

Medicare Supplement Insurance Policies: This is health insurance that can be purchased through a licensed agent, such as Selected Benefits, Inc., or from a private health insurance company. This type of policy will pay for some of the expenses not covered in Medicare Parts A and B. In Texas, this insurance is available in 10 standardized plans, each one named from a letter of the alphabet.

Medicare Supplement Open Enrollment Period: This will last 6 months and will begin on the 1st month that you are insured under Medicare Part B and when you’re age 65 or older. During this window of time, you have the guaranteed right to buy any Medicare supplement plan you like without regard to your medical history.

Modified adjusted gross income: This is defined as the adjusted gross income in addition to any tax-exempt Social Security benefits, receipt of interest payments, or any foreign income you or your spouse may have. Part A: Medicare Part A will provide financial help toward the cost of an inpatient hospital stay and skilled nursing services following a hospice, respite care, hospital stay, and some instances of home health services. Part B: Medicare Part B will provide financial help toward the cost of any medically necessary services such as routine doctor visits, any outpatient care, and certain other medical services that Part A won’t cover. Part C: This is simply referred to as Medicare Advantage. Part D: Part D simply includes the plans from Medicare-approved health insurance companies that include assistance with paying associated costs of RX prescription drugs.

Pre-Existing Condition: This is a health condition you had prior to the date that your new insurance policy became effective.

Premium: A dollar amount, normally fixed, that you will pay for a Texas Medicare Supplement policy. This can be paid monthly, quarterly, semi-annually, or annually.

Premium Penalty: These penalties can apply to both Medicare Part A and B if you fail to enroll when you first become eligible for Medicare. An exception would be if you qualify for a Special Enrollment Period in some cases.

Provider: This would be defined as a person, facility, or organization that will provide medical care and/or products, like a general physician, hospital, physical therapist, pharmacy, laboratory, outpatient clinic, or surgeon.

Standardized: All Medicare Supplement plans in Texas are the same, if looking at the plan letter, from insurance carrier to insurance carrier. For instance, BCBS of Texas Standard Plan F is the same as Mutual of Omaha’s Standard Plan F.

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