Question: There are so many words that you use in your articles that I don’t even understand. Could you explain some of them? I especially do not like those acronyms. Explain those to me!

Answer: One of the frustrating things about insurance, is that so much of it is hard to understand by the ordinary person. It is hard to understand because you don’t know what we are saying. So, here is an attempt at some of those commonly used words. I LOVE the question about the acronyms. I will start with those first.

CMS — Centers for Medicare and Medicaid. CMS is within the Department of Health and Human Services. This is the administrative branch of the Federal Government which oversees the Medicare and Medicaid programs.

PDP (Prescription Drug Plan) — This is the abbreviation used to describe those Medicare Part D Prescription Drug Plans that are stand-alone plans. The PDP’s only cover Prescription medications purchased at the pharmacy or through a mail order service. These are insurance products that are approved by Centers for Medicare Services to provide those who enroll in them, prescription drug coverage that will help to pay for their medications. This is NOT like Original Medicare. You must evaluate your need for Prescription Drug coverage and enroll in a plan available to you in your area. If you choose not to enroll in a Prescription Drug plan, you may have premium penalties that you have to pay later.

Medicare Advantage Plans (MA) — Medicare has recently started calling these plan Medicare Health Plans and lists them with this name on the www.Medicare.gov website. These are Health Insurance plans that include: Health Maintenance Organizations (HMO’s), Preferred Provider Organizations (PPO’s), Private Fee For Service plans (PFFS), Special Need Plans (SNP) or Medicare Saving Account plans (MSA). These plans offer coverage to those individuals with both Medicare Part A & B, and usually without End Stage Renal Disease. Enrollment in these plans means the individual is opting out of original Medicare (all their health & medical claims are covered by the Medicare Advantage Plan they chose).

HMO — Health Maintenance Organization. This is a Medicare Advantage type of health plan that offers primarily local and regional coverage. It can provide for emergency care outside of your region and usually worldwide. It requires that you see only participating physicians, specialists and hospitals. These plans often require a primary physician who manages all of your needs and makes the appropriate referrals when necessary. These types of plans probably will not pay for care outside of the approved network of providers. These HMO plans come with or without drug coverage.

HMO-POS — Health Maintenance Organization-Point of Service. This is the previously described HMO plan with an additional benefit. This Benefit is that you may receive care from non-network providers but with greater out-of-pocket costs (like 30 percent cost share to you). This benefit is usually limited to a dollar cap (like $1,500 or $5,000) per year.

PPO — Preferred Provider Organization. This is a Medicare Advantage type of health plan that offers both regional coverage, and access to those outside of your area. These plans allow you to see any physician, but if you see a participating physician (an “in-network” physician) you pay less than for one who is non-participating (an “out of network” physician). This is true for hospitals also, but out of network hospitals can be significantly more expensive. These types of plans usually do not require referrals. The out of network option allows individuals to have more choices in how they handle their health care. These PPO plans come with or without drug coverage.

PFFS — Private Fee For Service Plan. This is a Medicare Advantage type of health plan that allows you to go to any Medicare-approved doctor or hospital that accepts the plan’s payment. When you insure with this type of plan you may pay more or less for Medicare-covered services and they may provide extra benefits, more than in Original Medicare. To see if physicians and hospitals participate with a PFFS plan, you need to call the plan itself or ask the physician’s office prior to going to your appointment. These PFFS plans come with or without drug coverage.

Special Needs Plan (SNP) — This is a Medicare Advantage type of health plan that requires those enrolled to have specific medical diagnosis or conditions. This type of health plan is not commonly joined by the average Medicare eligible individual. These plans can be ideal for a person with a particular diagnosis or medical condition that is given extra attention by this plan.

Medicare Saving Account (MSA) — This is a type of Medicare Advantage Plan with very different rules and policies. The individual enrolled in this plan has more responsibilities with regard to paying bills and managing claims. There are many special rules with this plan and not all Medicare eligible individuals are able to enroll in this type of insurance product. This is a High Deductible insurance product, with Medicare paying you part of that High Deductible. This plan does not provide prescription drug coverage, so you would need additional insurance for your medications.

Initial Enrollment Period (IEP) — For individuals just becoming eligible for Medicare, this is the seven month period of time an individual can enroll in Medicare, usually around their 65th birthday. This includes the three months prior to your birthday month, your birthday month, and three months after your birthday month. For example if you are born in April, your IEP would be January, February, March, April, May, June, & July.

Open enrollment period (OEP)- Each year there is an annual open enrollment period for each part of Medicare coverage. The Open Enrollment Period for Medicare Part B is Jan, Feb, & March each year. If you don’t join during your Initial Enrollment Period you can join during this three month period. There will be penalties if you enroll late and your benefits will not begin until July 1st of that year. The OEP for Medicare Part D plans and Medicare Advantage Plans is October 15th to Dec. 7th. If you had Creditable coverage prior to that enrollment there is no penalty; if you didn’t have Creditable coverage there is a penalty for late enrollment. Your new plan choice will start Jan 1st. If you make no changes during this OEP each fall your current plan will continue into the next year.

Special Enrollment Period (SEP)- This enrollment period is available based on special circumstances you may have. The SEP means different things to different people, and can waive rules that would normally apply to enrollment at that time of year. One example: individuals and their spouses who receive benefits through an employer, and are eligible for Medicare. Once these benefits end, they have an SEP, 8 months from the end of the Employee Group Health Plan (EGHP) to enroll in Medicare Part B. This health insurance must be from active employment benefits, not COBRA or retiree benefits. This SEP would allow those individual who “qualify” to enroll in a product (Part B) that is not in its’ annual Open Enrollment Period.

For Medicare Part D there are more SEP’s than could be listed in this article. There are publications available that help to determine the many SEP’s available. Examples of SEP’s are the following: 1) If you have EPIC, you are allowed one SEP each year. That is one time to change the Part D plan you have or enroll for the first time into Medicare Part D. 2) When you move into, are in, or leave a Skilled Nursing Facility (SNF), you have a SEP to switch your Part D insurance. One you leave the SNF, you have 63 days to find a new/different Medicare Part D plan.

EPIC (Elderly Pharmaceutical Insurance Coverage Program) — This is a benefit offered by New York state to all those legal New York state residents who are over 65 years of age or older, and have an annual income of up to $75,000 for a single person or $100,000 if married. This EPIC benefit helps you cover the cost of your medications, purchased at a New York State Pharmacy. EPIC works as a secondary insurance after your Medicare Part D plan. There are a limited number of other states that have similar programs, known as SPAP’s (State Pharmaceutical Assistance Plans).

COBRA (The Consolidated Omnibus Budget Reconciliation Act) — gives workers and their families who lose their health benefits, the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances, such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan. COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end. COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.

As I said this list of definitions is not all-inclusive, but those most commonly asked of me. I will include more words and their definitions next week. Feel free to contact me with any words you might want included in next week’s list.

To contact Janell Sluga, GCMC with questions or concerns, please call 720-9797 or e-mail her at janells@lutheran-jamestown.org.