Below is a list of common terms and definitions you will see regarding Medigap plans:
Assignment – your doctor (or other supplier) agrees to be paid directly by Medicare, accepts the payment amount Medicare approves for services provided, and will not bill you for more than the Medicare deductible and coinsurance.
Coinsurance – An amount you may need to pay (a percentage) as your share of the expenses for medical services performed after you pay your deductible.
Copayment – An amount you may need to pay (a defined dollar value – e.g. $20) as your share of expenses for medical services and supplies.
Deductible – The amount you pay for health care before your insurance begins to pay benefits.
Excess Charges – An amount charged to the patient up to 15% above and beyond the Medicare-approved amount for a given service by your doctor. Applicable if your doctor does not accept assignment.
Guaranteed Renewable – The carrier cannot terminate an insurance policy unless you fail to pay your premiums, commit fraud, or make untrue statements to the carrier. All Medicare supplement policies issued are guaranteed renewable as of 1992.
Medicaid – A joint Federal and state program that helps people with limited income and resources to help take care of medical expenses.
Medical Underwriting – the process (based on medical history) that an insurance carrier uses to decide whether they will accept your application, add any pre-existing condition waiting periods (if allowed by state law), and how much they will charge in premium for your policy.
Medicare-Approved Amount – Under your Original Medicare program (Parts A & B), this is the amount a doctor that accepts assignment can be paid. It may be less than the amount your doctor actually charges. Medicare pays part of the amount and you pay the difference.
Open Enrollment Period (Medigap Insurance) – A one-time, 6-month period when you can buy any Medicare supplement plan you want that’s sold in your state. A carrier cannot refuse a Medigap policy or charge more due to health problems. This is allowed by Federal Law and starts when you’re 65 or older and enrolled in Part B.
Original Medicare – This is a common name referring to your Medicare Part A & Part B coverage. It’s fee-for-service coverage where the government pays your health care provider(s) directly for Part A and/or Part B benefits.
Pre-existing Condition – A health condition you had before the effective date of your policy.
Premium – The periodic payments to Medicare or your insurance company to keep your policy’s coverage in force.