Your Medicare Glossary

When you're learning about Medicare coverage, knowing the terminology is key to understanding your options. Use our glossary of terms to get to know more about Medicare.

Glossary Index

  • Accept assignment: Term used to indicate a doctor's agreement to accept the Medicare-approved amount paid for a service as full payment. If your doctor accepts assignment, your share is limited to your coinsurance payment, usually 20% of the Medicare-approved amount.
  • Advance coverage decision: A notice you get from a Medicare Advantage plan letting you know in advance whether it will cover a particular service.
  • Ambulatory surgical center: A facility where certain types of surgeries may be performed for patients who aren't expected to require more than 24 hours of care.
  • Appeal: The action you can take if you disagree with a coverage or payment decision made by Medicare or your Medicare health plan. You can also appeal if Medicare or your Medicare health plans stops providing or paying for a service, supply, item, or prescription drug that you still need.
  • Balance billing: Also known as "excess charges;" doctors who don't accept assignment may use this method to bill you for an additional payment. A doctor's excess charges cannot be more than 15% of the Medicare-approved amount (some states limit it to less than 15% and some do not allow it at all).
  • Beneficiary: A person who holds health care insurance through the Medicare or Medicaid programs.
  • Benefit period: Your use of hospital and skilled nursing facility (SNF) services is measured in "benefit periods." A benefit period starts the day you're admitted as an inpatient to a hospital or SNF, and ends after you haven't received any inpatient hospital or SNF care for 60 days in a row. There is no limit to the number of benefit periods, and you must pay the inpatient hospital deductible for each benefit period.
  • Benefits: The health care items or services covered under a health insurance plan. A health insurance plan's coverage documents explain which benefits are covered or excluded.
  • Brand name drug: A prescription drug that is sold under a trademarked brand name.
  • Catastrophic coverage: A cost-sharing stage within Prescription Drug coverage during which you pay only a small copay or coinsurance for a covered drug and your plan pays the rest of the cost.
  • Centers for Medicare & Medicaid Services (CMS): The federal agency that runs programs like Medicare and Medicaid.
  • Claim: The request for payment that you submit to Medicare or other health insurance when you get items and services that you think are covered.
  • Coinsurance: An amount (typically a percentage) that you may be required to pay as your share of the cost for services after you pay any deductibles.
  • Copayment (copay): Typically a set amount (rather than a percentage) that you may be required to pay as your share of the cost for a medical service or supply, such as a doctor's visit, hospital outpatient visit, or prescription drug.
  • Cost sharing: An amount you may be required to pay as a portion of the cost for a medical service or supply (e.g., a doctor's visit, hospital outpatient visit, or prescription drug). This amount may include copayments, coinsurance, and/or deductibles.
  • Coverage determination (Prescription Drug Coverage): A decision made by your Medicare drug plan (not the pharmacy) about your drug benefits, including whether a drug is covered, if you have met the requirements for getting a drug, how much you'll have to pay for a drug, and whether to make an exception to a plan rule when you request it. If you disagree with the coverage determination decision, the next step is an appeal.
  • Coverage gap: A period of time during which you pay higher cost sharing for prescription drugs until you spend enough to qualify for catastrophic coverage. This coverage gap begins when you and your plan have paid a set dollar amount for prescription drugs during that year.
  • Creditable coverage (Prescription Drug Coverage): Prescription drug coverage from a health plan other than a Medicare Part D standalone plan or a Medicare Advantage plan that includes prescription drug coverage and that meets certain Medicare standards.
  • Custodial care: Non-skilled personal care, like helping with daily living activities (bathing, dressing, eating, getting in or out of a bed/chair, moving around, and using the bathroom.
  • Deductible: The fixed amount you must pay for health care or prescriptions before Original Medicare, your prescription drug plan, or other insurance begins to pay.
  • Drug list: Also called a formulary, this is a list of prescription drugs covered by a prescription drug plan or another insurance plan with prescription drug benefits.
  • Dual eligible: A person who is eligible for both Original Medicare (Part A and Part B) and Medicaid.
  • Durable medical equipment: Certain medical equipment that is ordered by your doctor for use in the home (e.g., a walker, wheelchair, or hospital bed).
  • End-Stage Renal Disease (ESRD): Permanent kidney failure that requires dialysis or a kidney transplant.
  • Excess charges: The amount a provider who does not accept Medicare assignment may charge you over and above the Medicare-approved amount (this is typically 15%).
  • Extra help: A Medicare program that helps those with limited income/resources pay for the premiums, deductibles, and coinsurance costs associated with their prescription drug plan.
  • Formulary: Also called a drug list, this is a list of prescription drugs covered by a prescription drug plan or another insurance plan with prescription drug benefits.
  • Generic drug: A prescription drug that can be used as a lower-cost alternative to a brand-name drug. Generic drugs have the same active ingredients as their brand-name version, and are rated by the Food and Drug Administration (FDA) to be as safe, as effective, and to use the same active ingredients as brand-name drugs.
  • Grievance: A complaint you file about the way your Medicare health plan or Medicare drug plan is providing care (e.g., if you're unhappy with the customer service of your plan). However, complaints about a plan's refusal to cover a service, supply, or prescription, should be filed as an appeal.
  • Guaranteed issue rights: Also called "Medigap protections," rights you have in certain situations when insurance companies are required by law to sell or offer you a Medigap policy without conditions, exclusions for preexisting conditions, or higher chargers because of a past or present health problem.
  • Guaranteed renewable policy: An insurance policy that can't be terminated by the insurance company unless you make untrue statements to the insurance company, commit fraud, or don't pay your premiums (all Medigap policies issued since 1992 are guaranteed renewable policies).
  • Health care provider: A person or organization that's licensed to give health care (e.g., doctors, nurses, and hospitals).
  • Health coverage: The legal entitlement to payment or reimbursement for your health care expenses, typically through a contract with a health insurance company, a group health plan offered through an employer, or a government program.
  • Home health care: Skilled nursing care and therapy provided on a part-time/intermittent basis to those who cannot leave the home (e.g., speech therapy or physical therapy).
  • Health Maintenance Organization (HMO) plan: Type of Medicare Advantage plan in which you must use doctors and hospitals in the plan's network for your care. You are responsible for paying your own care if you go outside the network for services other than emergency care, urgent care, or out-of-area renal dialysis.
  • Hospice care: Care for the terminally ill that focuses on controlling symptoms and managing pain.
  • In-network: A network consists of doctors, hospitals, pharmacies, and other health care providers who have agreed to discount the cost of their services/supplies for members of a certain insurance plan. Some insurance plans only cover your care if it's from in-network doctors, hospitals, pharmacies, and other health care providers.
  • Initial Enrollment Period (IEP): Period of time when you first become eligible to enroll in Medicare or a Medicare plan. Typically it's the seven-month period that starts three months before the month you turn 65, and ends three months after the month you turn 65.
  • Inpatient hospital care: Treatment you get in an acute care hospital, critical access hospital or inpatient rehabilitation facility, as well as long-term care hospital, inpatient care (as part of a qualifying research study), and mental health care.
  • Limiting charge: In Original Medicare, the highest amount of money you can be charged for a covered service by doctors and other health care suppliers who don't accept assignment. The limiting charge is 15% over Medicare's approved amount.
  • Long-term care: Care and services provided to people of any age who are unable to perform basic activities of daily living, like dressing or bathing. Long-term care can be provided at home, in the community, in assisted living, or in nursing homes.
  • Long-term care hospital: Acute care hospitals that provide treatment like comprehensive rehabilitation, respiratory therapy, head trauma treatment, and pain management for patients who stay, on average, more than 25 days.
  • Medicaid: A federal and state medical assistance program that helps certain people with limited income/resources. It includes programs that help pay Medicare premiums and cost sharing.
  • Medicare: A federal government health program for people who are age 65 or older, people under age 65 with certain disabilities, and people with End Stage Renal Disease (ESRD).
  • Medicare Advantage Plan: Also called "Part C", a private health plan that contracts with the Medicare plan to deliver Medicare-covered benefits as well as some supplement benefits.
  • Medicare Advantage Prescription Drug Plan: Also called "Part D", a Medicare Advantage plan that includes prescription drug coverage.
  • Medicare Open Enrollment Period: During the Medicare Open Enrollment Period you can change your Medicare Advantage or Prescription Drug plan coverage. The Enrollment Period begins on October 15th and ends on December 7th.
  • Medicare Select: Medicare Select plans provide full coverage at a reduced premium in exchange for having to use network providers.
  • Medicare Supplement Insurance (Medigap): Insurance sold by private insurance companies to fill "gaps" in Original Medicare coverage, like deductibles, copays, and coinsurance.
  • Medigap: See "Medicare Supplement Insurance (Medigap)"
  • Out-of-pocket costs: The amount you pay directly for Medicare care and services, like deductibles, copays, and coinsurance. Premiums don't count toward your maximum out-of-pocket costs thresholds.
  • Out-of-pocket limit: A limit set by Medicare Advantage plans on the amount of money you will need to spend per year out-of-pocket. For Medicare Prescription Drug coverage plans, this is the amount you will have to spend out-of-pocket before catastrophic coverage begins for the remainder of the year.
  • Outpatient care: Care a person receives in a clinic, hospital, or health care facility when you are not admitted for an inpatient stay.
  • Part A: The part of Original Medicare that helps with the cost of hospital stays, skilled nursing services, and other types of skilled care.
  • Part B: The part of Original Medicare that helps with the cost of doctor visits and other medical services.
  • Part C: Also called Medicare Advantage; the part of Medicare that allows private companies to offer health care plans that combine the benefits of Part A and Part B in one plan. Some Medicare Advantage plans also include prescription drug coverage.
  • Part D: Also called "prescription drug coverage;" the part of Medicare that allows private companies to offer health care plans that assist with the cost of prescription drugs. Part D coverage can be offered as a standalone plan, or as part of a Medicare Advantage plan.
  • Point of Service (POS) plan: A type of Medicare Advantage HMO plan that permits members to visit doctors and hospitals outside their network for some covered services, but typically has higher copayments and coinsurance.
  • Pre-existing condition: The name for an illness or medical condition that you have already been diagnosed with by the time you're applying for an insurance plan.
  • Preferred Provider Organization (PPO): A type of Medicare Advantage plan that allows you to use doctors and hospitals both in and outside of the network (though going outside the network will typically require you to pay a larger portion of the cost of your care).
  • Premium: The periodic payment you make to Medicare, an insurance company, or a health care plan for health or prescription drug coverage.
  • Preventative care: Care that is used to maintain your health or to find illness early when treatment is most effective (e.g., flu shots, diabetes screenings, and mammograms).
  • Provider: The person or organization that provides medical services and products, like a hospital, pharmacy, doctor, or outpatient clinic.
  • Qualifying disability: A condition (medical or physical) that prevents you from working and has lasted beyond twelve years.
  • Referral: A written order from your primary care doctor for you to see a specialist or to get certain medical services. Without a referral, these services may not be covered by your plan.
  • Rehabilitation services: Health care services that help to improve skills and daily living functions that may have been lost or impaired because of sickness, injury, or a disability (e.g., speech-language pathology and psychiatric rehabilitation services).
  • Respite care: Temporary care provided by a nursing home, hospice inpatient facility, or hospital so that a patient's caregiver can have time off to rest.
  • Service area: In general, a certain area in which a plan offers service (e.g., a county, state, or region).
  • Skilled nursing care: Nursing care provided by a licensed nurse.
  • Special Enrollment Period (SEP): Based on special circumstances, some people may qualify to enroll in Medicare outside of their Initial Enrollment Period or the General Enrollment Period.
  • Tiers: Categories of drugs that have a different cost per category (typically a drug in a lower tier costs less than one in a higher tier).

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