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Part V Medicare Supplemental Insurance Series
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What Terms Should You Know?
When speaking to a supplemental insurance broker, it's important to know what kinds of terms will be used and what they mean. Below is a list of terminology that every consumer should know when they're shopping for Medicare supplemental insurance.
1. Coinsurance - coinsurance is the amount you'll be expected to pay after you've met your deductible. This amount is usually given as a percentage. For example, if your deductible is $1,000 dollars and your coinsurance is 25 percent, then after you've paid your deductible you'll be expected to pay 25 percent of your medical costs. The insurance would pick up the other 75 percent.
2. Copayment - a copayment or "copay" is an amount you pay for certain appointments, prescriptions, medical care, or supplies. This number is usually a fixed dollar amount. For example, if your copay is $30 dollars for doctor's appointments, you'll be expected to pay that amount, but usually not more (so long as you've met your deductible). If your copay for generic prescriptions is $10 dollars the same rules apply.
3. Deductible - this is the amount of money that must come out of your pocket before your insurance kicks in. This amount varies from plan to plan, so shop around. If your deductible is $1,000 dollars, you'll need to pay that much out of your own pocket before your insurance takes effect. Note, however, that in many cases well-check exams and certain medical services are not part of your deductible, so you won't have to pay more for them. Ask your broker what types of services aren't a part of the deductible.
4. Guaranteed Issue Rights - These are sometimes called "Medigap Protections" and they're the rights you have when an insurance company sells you supplemental insurance. For example, if you enroll during your open enrollment phase, you can't be denied for a pre-existing condition. This is a part of your guaranteed issue rights. Ask each broker you speak to what kind of rights you are entitled to when you shop for insurance.
5. Guaranteed Renewable - this means that as long as you pay your premiums your insurance company can't terminate your coverage. All Medicare supplemental insurance policies issued since 1992 are guaranteed renewable.
6. Medical Underwriting - this is the process that an insurance company uses to decide whether or not your application for insurance will be accepted. This is based on your health and any pre-existing conditions you may have. Medical underwriting also decides exactly how much you will be charged for your coverage.
7. Pre-existing condition - this is a health problem that a doctor has diagnosed you with before the date that your insurance policy begins.
8. Premium - this is the amount you pay every month for your health insurance or supplemental insurance.
9. State Insurance Department - every state has an insurance department that can answer questions about insurance coverage in that state. You can also call this department to make sure that an insurance provider is licensed to sell insurance, and to get tips for getting the coverage you need.
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