Flooded by a sea of acronyms, technical terms, facts and figures when you first explore Medicare, you might feel like putting up your hands and giving up. Don’t, because it isn’t as complicated as it first seems to be. In fact, once you get a handle on the basic terminology you will be well on your way. It all starts with the four parts of Medicare.
Medicare Parts Defined
There are four different parts of Medicare, and each one corresponds to a letter of the alphabet. Parts A and B constitute what is known as Original or Traditional Medicare.
- Part A is your Original Medicare hospital insurance.
- Part B covers your doctor and outpatient services through Original Medicare.
- Part C, also called Medicare Advantage, are health plans offered by private insurance companies. These plans are required to give you all the benefits of Original Medicare (Part A and B), and sometimes offer extras such as dental, vision, hearing, and health services.
- Part D is prescription drug coverage, is another private insurance option. You can get this as a stand alone plan to use with Original Medicare or as part of a Medicare Advantage Plan (MAPD).
Here’s an important fact you’ll need to know. If you enroll in a Medicare Advantage plan (Part C), then you will be dis-enrolled from Part A and Part B. In other words, Medicare Advantage replaces your Original Medicare for as long as you are enrolled, but you can always switch back at the end of your enrollment period.
Medicare Plan Type Acronyms
Each type of Medicare Advantage plan has its own acronym, and it is important to be familiar with these as well.
- MA means Medicare Advantage.
- MAPD means Medicare Advantage Plan which includes Prescription Drug Coverage.
- HMO means Health Maintenance Organization; this refers to a type of plan that in order to obtain benefits you need to use health providers and hospitals within the plan’s network.
- MSA means Medical Savings Account; in this type of program you have a special savings account with a high-deductible plan.
- PFFS means Private Fee-For-Service; this type of plan allows you to choose any provider who is Medicare-eligible, as long as they accept the payment terms and conditions of the plan.
- POS means Point of Service; under this plan you are allowed to go outside the network for certain services, but you may have to pay more for these services.
- PPO means Preferred Provider Organization; in a plan like this you can use providers in or outside the network, but you might have to pay more for those outside the network.
- SNP means Special Needs Plan; this type of plan is only for those with diabetes, End Stage Renal Disease, or other special disorders.
In conclusion, seniors, it’s important that you be familiar with the terminology in order to find out the right type of plan for you. For a list of many more Medicare terms, visit our online glossary of terms here.