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Confused About Medicare? Understanding these key terms can help…

Annual Notification of Change

A booklet sent by your Medicare Advantage health plan (health insurance) company that informs you of changes to your benefits for 2015. It is included in a big package of material, mailed around the first of October.

Coinsurance

The amount you may be required to pay as your share of the cost for services after you pay any deductibles. Coinsurance is usually a percentage (for example, 20%).

Copayment

The amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor’s visit, hospital outpatient visit, or prescription. A copayment is usually a set amount, rather than a percentage. For example, you might pay $10 or $20 for a doctor’s visit or prescription.

Deductible

The amount you must pay for health care or prescriptions before Medicare, your prescription drug plan, or your other insurance begins to pay.

Drug Formulary

A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits.

Out of Pocket Maximum

The yearly out-of-pocket maximum is the highest or total amount your health insurance company requires you to pay towards the cost of your hospital and medical services. Drug costs do not contribute towards the out-of-pocket maximum.

Premium

The periodic payment to Medicare, an insurance company, or a health care plan for health or prescription drug coverage.

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