Medicare jargon: Plans, parts, and penalties

Written by Warren Cranford, Medicare licensed agent

Do you ever ask yourself, “WHY does Medicare have to be so complicated?” If you do, then I have good news and bad news.

Good news – You are not alone in your questioning.

Bad news – There is no valid or helpful answer. To use a phrase, I borrowed from my kids, “It is what it is!” Medicare is complicated. So, we must find ways to navigate the maze of facts,

forms and figures by researching reliable sources and working with qualified professionals to

get accurate information. It’s simple, but it’s not necessarily easy.

In this article, we will focus on some basic information and ways to simplify and retain the

information.

First, Medicare can seem like the world of acronyms and alphabet soup! There’s Part A, B, C and D. And don’t forget Plans F, G, N and L! And there’s an abundance of abbreviations – CMS, MAPD, PDP, AEP, OEP – just to name a few.

Hint #1 - When you hear the word PART and a letter following – you are talking about the four

Parts of Medicare. Parts A and B are what is referred to as Original Medicare, because

originally there were just two parts – A for Hospitalization and B for Medical. Then in 2003,

the Medicare Modernization Act introduced the largest overhaul in Medicare history bringing

Parts C and D. Part C is the Medicare Advantage Program which allowed Private companies to

manage Medicare Benefits, and Part D which was fully implemented in 2006 created what is

known as the PDP – or Prescription Drug Plan. So, again, the word “part” means it’s Part of

the Medicare Program. CMS (The Centers for Medicare and Medicaid Services) is the

governmental entity that oversees Medicare.

Hint #2 – When you see the word “Plan” followed by a letter – you know that is a Medicare or

Medigap Supplement. Supplements can be obtained as a secondary coverage to Medicare A and B. Supplements have standardized Plans that are indicated by letters of the alphabet like Plan F, Plan G, Plan N, etc.

So, there you have it – Parts with letters are part of Medicare and Plans with letters are Supplements.

Part C is the Advantage Plan Program. Medicare Beneficiaries cannot have an Advantage plan

and a Medigap Supplement at the same time. Advantage plans have a service area based on

residential address – each county has different Advantage Plan offerings for residents who live in the service area at least six months of the year. However, the service area is not to be

confused with the Provider Network – depending on the type of Advantage plan, there may be a local, regional or national network. Many times, Part C Advantage Plans combine Parts A, B and D, and then add additional benefits not covered by Original Medicare such as Dental,

Vision, and Fitness Programs, etc.

As mentioned earlier, Part D is the Prescription Drug Program. There are two ways to get a Part D Plan – as a stand-alone option or included in an Advantage plan. PDP (Prescription Drug Plan) is the stand-alone option. This can be used with Original Medicare or with a Supplement. MAPD (Medicare Advantage Prescription Drug Plan) is where the Part C Advantage plan includes a Part D benefit so there is no need for a Stand-Alone PDP. A Medicare beneficiary cannot have a stand-alone Part D plan and a Medicare Advantage Part D plan at the same time. Enrollment in one will automatically cancel the other.

There are penalties associated with not obtaining Parts B and/or D when first eligible. One

must be sure that if they do not enroll in Parts B or D when first eligible, they have other

creditable coverage possibly through their employer or perhaps veteran or military coverage.

Be sure to understand the guidelines concerning these penalties so that you can avoid lifetime assessments.

Hopefully, you feel a little more familiar with the mechanics of Medicare Plans after reading

this short overview. Let me encourage you to lay aside any stress you may have been carrying

regarding the overwhelming nature of Medicare. Take action to find answers to your questions from reliable and unbiased sources. Don’t be afraid to ask questions and seek assistance from experts you trust. You can navigate the Medicare Maze!

Don’t let Medicare cause stress, call me anytime! My services are always free. Reminder – it’s

AEP Oct. 17 through Dec. 7. Don’t wait until December to call to check out your options for

2025 – call now if you would like to have a review performed. Also, if you are turning 65 in the next six months, give me a call and I will walk through the process with you.

Don’t let Medicare drag you down,

Warren Cranford

Medicare Licensed Agent

615-594-1810