Words to know

Medicare plans use many of the same terminology as other health care plans:

• Premium is the cost of purchasing Medicare coverage. Plans with higher premiums usually have richer benefits and lower out-of-pocket expenses.
• Copayment (or copay) is a set dollar amount you'll pay to see a doctor or fill a prescription. The amount you'll pay will depend on your plan — some plans have a $0 copay.
• Deductible is the amount you pay for health care before a plan starts paying.
• Coinsurance is the cost of treatment shared between you and the plan after you've reached your deductible. With Original Medicare, you pay 20%, and Medicare pays the rest.
• Explanation of Benefits (EOB) statements aren't bills; they show the total amount your provider has charged for services and how much Medicare or your insurer paid. It's a good idea to keep these for your records.

Topics: Medicare