MEDICARE GLOSSARY
COMMON MEDICARE TERMS
Term used to indicate a doctor’s agreement to take 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.
A document that private Medicare plans send to their members each fall. The ANOC includes details of any changes in plan coverage, costs, or service areas that will take effect on January 1st.
Under Medicare Part B, if doctors do not accept assignment, they may request additional payment through balance billing, also known as excess charges. These charges cannot exceed 15% of the Medicare-approved amount, but some states may have stricter limits or prohibit them altogether.
A person who has health care insurance through the Medicare or Medicaid program.
In Medicare Part A, a benefit period begins when you are admitted to a hospital or skilled nursing facility and ends after 60 consecutive days out. You can be hospitalized multiple times within one benefit period, and there’s no limit to how many benefit periods Medicare will cover. Each benefit period requires a deductible.
A prescription drug that is sold under a trademarked brand name.
A private insurance company that has a contract with Medicare to pay your physician and most other Medicare Part B bills.
A cost-sharing stage in a Medicare Part D during which you pay only a small copay or coinsurance for a covered drug, and your plan pays the rest of the cost.
The US federal agency that administers Medicare, Medicaid, and the State Children’s Health Insurance Program.
A certificate from a group health plan or health insurance provider (including an HMO) that states the duration of your coverage.
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. It’s a law that protects you and your family if you lose your employer-sponsored health benefits. If you qualify for COBRA coverage, then you have the option of continuing your employer-sponsored health plan for a limited period of time.
Coinsurance is the amount you pay for services after meeting your plan's deductibles. In Original Medicare, this is typically 20% of the Medicare-approved amount, applicable after you pay your Part A or Part B deductible. In a Medicare Prescription Drug Plan, the coinsurance may vary based on your total expenses.
Process for determining the responsibilities of multiple health plans with financial obligations for a medical claim, commonly referred to as "cross-over."
In some Medicare plans, a copayment, or "co-pay," is a fixed amount you pay for services like doctor visits or prescriptions, typically ranging from $10 to $20.
A term for the way Medicare shares your health care costs with you. The most common types of cost sharing are deductibles, copays and coinsurance.
Previous health coverage can include group health plans (including COBRA), HMOs, individual insurance policies, Medicare, and Medicaid, provided there hasn't been a significant break in coverage. This prior coverage may count toward any pre-existing condition exclusions in a new health plan. You can prove this with a certificate of creditable coverage or other documents, such as a health insurance ID card.
Care that provides help with the activities of daily living, like eating, bathing, or getting dressed. Most long-term care is considered custodial care.
A pre-set, fixed amount that you pay for your medical care and services first, before Medicare or other insurance starts to pay.
Durable medical equipment (DME) ordered by a doctor for home use, including walkers, wheelchairs, and hospital beds, is covered by both Medicare Parts A and B.
A person who is eligible for both Original Medicare (Parts A and B) and Medicaid.
ESRD is permanent kidney failure requiring dialysis or a kidney transplant.
The amount a provider who does not accept Medicare assignment may charge you above the Medicare-approved amount is generally 15%.
A Medicare program that helps people with limited income and resources pay for prescription drug plan costs, such as premiums, deductibles, and coinsurance
The Program provides health coverage for current and retired federal employees. During open season, you will receive information about your prescription drug coverage and whether it is creditable. Be sure to read this carefully and contact your FEHB insurer before making any changes, as staying with your current plan is often beneficial. For most people, joining a Medicare drug plan is usually not cost-effective unless you qualify for extra help. Remember, canceling your FEHB drug coverage also cancels your overall FEHB plan, which could lead to higher medical costs.
A list of the prescription drugs that are covered by a specific Medicare Part D plan.
If you missed the opportunity to enroll in Medicare during your Initial Enrollment Period, you can still sign up during the General Enrollment Period (GEP). The GEP takes place each year from January 1 to March 31. However, be aware that you may face a late enrollment penalty, and your coverage will begin on July 1.
Generic prescription drugs are affordable alternatives to brand-name drugs, containing the same active ingredients and providing the same effects. The FDA states that they match brand-name drugs in safety, quality, and usage.
A key feature of Medicare supplement insurance (Medigap) plans is that coverage is automatically renewed each year, as long as you pay the premium and have accurately completed your application for Medicare supplement insurance.
HIPAA is a federal law that allows individuals to qualify for comparable health insurance immediately upon changing jobs. Title II, Subtitle F grants the Department of Health and Human Services (HHS) the authority to set standards for electronic healthcare data exchange, specify medical and administrative code sets, mandate national identification systems for patients, providers, payers, and employers, and establish measures to protect the privacy and security of personal health information. It is also known as the Kennedy-Kassebaum Bill or Public Law 104-191.
A Medicare Advantage plan that requires you to use in-network doctors and hospitals. If you seek care outside the network, except for emergencies, urgent care, or out-of-area renal dialysis, you will pay for those services yourself.
A health insurance plan in which you pay a significant deductible (usually more than $1,000) before the plan begins to help with your costs.
In Original Medicare, skilled nursing care and therapies, such as speech and physical therapy, are provided on a part-time basis for individuals unable to leave home.
Hospice care is designed for individuals who are terminally ill, focusing on symptom control and pain management. Part A of hospice care also includes support services for both patients and their caregivers. This coverage extends to hospice care provided at home as well as care received in a specialized hospice facility outside the home.
When you first become eligible to enroll in Medicare or a Medicare plan. For most, it’s the seven-month period that begins three months before the month you turn 65 and ends three months after the month you turn 65.
Hospital care begins with a doctor's admission, but staying overnight doesn't always mean you're an inpatient, especially if it's just for observation. It's important to check your admission status with the hospital staff, as certain care may not be covered by Medicare Part A if you aren't classified as an inpatient.
Medicare Part A offers 60 lifetime reserve days for hospital stays longer than 90 days in a benefit period. Once used, these days cannot be replaced.
Long-term care that assists with daily activities such as eating, dressing, and bathing.
Medicaid is a medical assistance program designed for individuals and families with limited incomes and resources. It is funded jointly by the federal and state governments, with management handled by the states. Additionally, Medicaid includes programs that help cover Medicare premiums and cost-sharing expenses.
Medicare MSA Plans include a high-deductible health plan and a bank account. Each year, Medicare provides a specific amount for healthcare, with a portion deposited into your account. This deposit is less than your deductible, so you'll need to pay out of pocket before coverage starts. Both Part A and Part B services contribute to the deductible. Once you reach your out-of-pocket limit, the plan covers your Medicare services fully. Any remaining balance in your account at the year's end rolls over to the next year. As of 2010, Medicare MSA Plans are only available in Pennsylvania.
Services or supplies that are needed to diagnose or treat a medical condition, according to the accepted standards of medical practice.
A federal government health program for: People age 65 or older, people under age 65 with certain disabilities, people of all ages with End Stage Renal Disease (ESRD)
A private company's plan provides Medicare Parts A and B coverage, along with additional benefits. Many Advantage plans also include prescription drug coverage.
From January 1 to February 14 each year, you can disenroll from a Medicare Advantage plan and return to Original Medicare. If your plan included prescription drug coverage, you can enroll in a Medicare Part D plan during this period.
Medicare determines a reasonable amount for covered services. Providers who "accept assignment" agree to this amount as full payment, while those who accept Medicare but not assignments can charge up to 15% more.
Medicare assignment refers to the Medicare-approved amount for payment in full for a medical service. Doctors can choose to accept the assignment or not. If they do not accept assignment, then they may charge more than the Medicare-approved amount for a service. This means you may pay more.
The time period each year during which you may enroll in a Medicare prescription drug plan (Part D) and a Medicare Advantage (Part C) plan. Medicare Open Enrollment is October 15 through December 7 every year.
A Medicare supplement insurance plan that mandates the use of specific hospitals and doctors for full benefits, except in emergencies.
Medicare supplement insurance plans, offered by private companies, help cover out-of-pocket expenses such as deductibles, copayments, and coinsurance that Original Medicare does not cover. Each standardized plan is designated by a letter, and it’s important not to confuse these plans with Medicare Parts A, B, C, and D.
You have the right to buy any Medicare supplement insurance plan available in your area for six months after enrolling in Medicare Part B. During this time, insurers cannot deny you coverage or charge higher premiums based on your health.
A notice you get after the doctor or provider files a claim for Part A and Part B services in Original Medicare. It explains what the provider billed for, the Medicare-approved amount, how much Medicare paid, and what you must pay.
A term sometimes used to refer to Medicare supplement insurance.
Health care providers, such as hospitals, doctors, and pharmacies, form a network to provide care to members of Medicare Advantage or Medicare Part D plans. These are known as "network providers" and "network pharmacies."
The amount you pay directly for Medicare services, including deductibles, copays, and coinsurance. Premiums do not count toward maximum out-of-pocket cost thresholds.
Your out-of-pocket costs in a Medicare Advantage Plan refer to the maximum amount you'll pay in a calendar year for covered medical care, including deductibles and copayments. These costs depend on factors such as:
1. Whether there's a monthly premium in addition to your Part B premium.
2. Any contributions the plan makes to your Part B premium.
3. The presence of an annual deductible.
4. The copayment amounts for visits or services.
5. The frequency and type of healthcare services you need.
6. Compliance with the plan's network rules.
7. The cost of any additional coverage.
8. Any yearly limits on your overall out-of-pocket expenses.
Understanding these factors can help you manage your healthcare costs effectively.
Care provided in a clinic, hospital, or healthcare facility without inpatient admission.
An amount added to your monthly premium for Medicare Part B, or for a Medicare Prescription Drug Plan, if you don’t join when you’re first able to. You pay this higher amount as long as you have Medicare. There are some exceptions.
A Medicare Advantage HMO plan that allows members to visit out-of-network doctors and hospitals for certain services, usually with higher copayments or coinsurance. Some POS plans also do not require referrals for specialty services.
A health problem you had before the date that a new insurance policy starts.
A type of Medicare Advantage plan in which you can use doctors and hospitals in the plan’s network or go to doctors and hospitals outside the network. If you go outside the network, you’ll usually pay a larger share of the cost of your care.
A monthly fee is required to enroll in the plan.
Preventive care helps maintain health and catch illnesses early. Examples include flu shots and diabetes screenings.
A type of Medicare Advantage plan that allows you to visit any Medicare-eligible doctor, hospital, or other health care service provider who is willing to accept the plan’s payment terms and conditions.
The program helps people aged 55 and older maintain independence in their communities by providing medical, social, and long-term care services. PACE is available only in states that include it in their Medicaid program.
A person or organization that provides medical services and products, including doctors, hospitals, pharmacies, laboratories, and outpatient clinics.
A condition, either medical or physical, that has lasted or is expected to last for more than 12 calendar months and prevents you from working.
A written order from your primary care doctor is needed to see a specialist or obtain certain services. In many HMOs, you must get a referral beforehand; otherwise, your insurance may not cover the costs.
Your doctor prescribes rehabilitation services to support your recovery from an illness or injury. These include working with a physical therapist for mobility and an occupational therapist for daily activities like dressing.
Health insurance coverage provided by employers for retired employees.
A "second opinion" is when a different doctor provides their insight on your condition and possible treatments.
A secondary insurance policy that covers medical care claims, such as Medicare or Medicaid, depending on the situation.
A health plan's service area is the location where it accepts members and provides medical services. If you move out of this area, you may be disenrolled from the plan.
A level of care that includes services that can only be performed safely and correctly by a licensed nurse (either a registered nurse or a licensed practical nurse).
Individuals who qualify due to special circumstances can enroll in Medicare outside their Initial or General Enrollment Periods. Generally, signing up during a Special Enrollment Period does not result in a late enrollment penalty.
A type of Medicare Advantage plan that serves people with special health care needs.
In Medicare Part D, you must first try a less expensive medication to see if it works. You can use a more expensive drug only if you and your doctor prove that the cheaper option was ineffective.
In Medicare Part D, drug plans have a formulary that categorizes medications into tiers. Each tier has a different level of cost-sharing. For instance, the copayment for a generic drug may be lower than that for its brand-name counterpart. The specifics of the cost-sharing can vary from one plan to another.
Actions taken to address a health issue; medicine and surgery are forms of treatment.
A program for active-duty and retired uniformed services members and their families.
Additional coverage is available for retirees of the uniformed services who are Medicare-eligible and aged 65 or older, as well as their family members, survivors, and certain former spouses.
A teletypewriter (TTY) is a communication device for individuals who are deaf, hard of hearing, or have speech impairments. It has a keyboard, display screen, and modem for sending messages over phone lines. Those without a TTY can use a Message Relay Center (MRC) to communicate with TTY users through operator assistance.
Urgent care is the medical attention you receive for a sudden illness or injury that needs immediate treatment but is not life-threatening. If you're in a Medicare health plan (excluding Original Medicare), your primary care doctor usually provides this care. If you're outside your plan's service area temporarily and can't wait to return home, the plan must cover the cost of this care.
Veterans and military service members may qualify for health and prescription drug coverage through the U.S. Department of Veterans Affairs (VA). If you choose a Medicare drug plan, you cannot use both coverages for the same prescription.
The waiting period is the time that must pass before an employee or their dependent can enroll in the group health plan. If enrollment occurs as a late enrollee or during a special enrollment period, the time before enrollment does not count toward the waiting period. If a plan includes both a waiting period and a pre-existing condition exclusion, the exclusion begins with the waiting period. Days in a waiting period are not considered creditable coverage unless there is other creditable coverage during that time, and they do not count toward determining a significant break in coverage.
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