Let’s face it: Medicare terms can sound like alphabet soup. If you’ve ever felt confused by acronyms and fine print, you’re not alone. Here’s a quick, jargon-free guide to the most common Medicare terms.
HMO (Health Maintenance Organization)
A type of Medicare Advantage plan. You usually need to choose doctors within the plan’s network and get referrals to see specialists.
PPO (Preferred Provider Organization)
Another type of Medicare Advantage plan. Offers more flexibility with out-of-network care but may come with higher costs.
Deductible
The amount you pay out-of-pocket for healthcare before your plan starts to pay.
MOOP (Maximum Out-of-Pocket)
This is the most you’d have to pay in a year for covered services. Once you hit that limit, the plan covers 100% of approved costs.
Formulary
The list of drugs a plan covers. Plans group medications into tiers which affect your cost.
Premium
The monthly amount you pay to have Medicare coverage.
Copayment vs. Coinsurance
- Copayment: A fixed dollar amount you pay for a service.
- Coinsurance: A percentage you pay of the total cost.
Summary
Understanding these basics can make a big difference. And when in doubt, ask a licensed agent to walk you through your options in plain language.
