Glossary

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A

Accept Assignment – In Original Medicare, this means a doctor or supplier agrees to accept the Medicare-approved amount as full payment. If you are in Original Medicare, it can save you money if your doctor accepts assignment. You still pay your share of the cost of the doctor's visit.

Annual Enrollment Period – Specific time of the year in which you can enroll in Medicare Advantage plans and prescription drug plans. Also called “Annual Election Period.”

Appeal – A special kind of complaint you make if you disagree with certain kinds of decisions made by Original Medicare or by your health plan. You can appeal if you request a health care service, supply or prescription that you think you should be able to get from your health plan, or you request payment for health care you already received, and Medicare or the health plan denies the request. You can also appeal if you are already receiving coverage and Medicare or the plan stops paying. There are specific processes your Medicare Advantage plan, other Medicare health plan, Medicare drug plan, or Original Medicare must use when you ask for an appeal. (See Grievance.)

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B

Balance Billing – An additional payment made to a doctor who does not accept assignment. You may not be billed more than an additional 15% of the Medicare-approved amount.

Beneficiary – The name for a person who has health care insurance through the Medicare or Medicaid program.

Benefits Administrator – Person from an employer group who is responsible for delivering information about a health plan to that group.

Benefit Period – A “benefit period” begins the day you go to a hospital or skilled nursing facility (SNF). The benefit period ends when you haven’t received any hospital care (or skilled care in a SNF) for 60 days in a row. If you go into a hospital or a SNF after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible (if applicable) for each benefit period. There is no limit to the number of benefit periods.

Brand Name Drug – A prescription drug sold under a trademarked name.

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C

Catastrophic Coverage – Once your total drug costs reach the maximum, you pay a small coinsurance (like 5%) or a small copayment for covered drug costs until the end of the calendar year.

Centers for Medicare & Medicaid Services (CMS) – A U.S. federal agency that oversees the Medicare program and helps states manage Medicaid programs.

Coinsurance – The amount you may be required to pay for services after you pay any plan deductibles. In Original Medicare, this is a percentage of the Medicare-approved amount. You have to pay this amount after you pay the deductible for Part A and/or Part B.

Coordination of Benefits – Process for determining the respective responsibilities of two or more health plans that have some financial responsibility for a medical claim. Also called “crossover.”

Copayment or "copay" CopaymentCopay – The amount you pay for each medical service, like a doctor’s visit, or prescription in some Medicare health and prescription drug plans. A copayment is usually a set amount you pay. For example, this could be $10 or $20 for a doctor’s visit or prescription.

Cost Sharing – The amount you pay for health care and/or prescriptions. This amount can include copayments, coinsurance and/or deductibles.

Coverage Gap – In Medicare Part D, there is a stage where you will pay most of the cost of your prescriptions. This stage falls between your initial coverage limit and catastrophic coverage. (See Catastrophic Coverage.)

Creditable Coverage (Medigap)Creditable Prescription Coverage – Certain kinds of previous health insurance coverage that can be used to shorten a pre-existing condition waiting period under a Medigap policy. (See Pre-Existing Conditions.)

Creditable Coverage (Pharmacy) – Certain kinds of previous prescription drug coverage that meet Medicare's minimum standards since it is expected to pay, on average, at least as much as Medicare's standard prescription drug coverage.

Custodial Care – Nonskilled, personal care, such as help with activities of daily living like bathing, dressing, eating, getting in or out of a bed or chair, moving around and using the bathroom. It may also include care that most people do themselves, like using eye drops. In most cases, Medicare does not pay for custodial care.

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D

Deductible – The amount you must pay for health care or prescriptions before Original Medicare, your prescription drug plan or other insurance begins to pay. For example, in Original Medicare, you pay a new deductible for each benefit period for Part A, and each year for Part B. These amounts can change every year.

Defined Standard Benefit Plan – The plan that Congress wrote for Part D. The Standard Benefit Plan is the minimum allowable plan to be offered and still be considered creditable coverage. (See Creditable Coverage.)

Drug List – A list of prescription drugs covered by a plan. This list is also called a “formulary.”

Dual Eligible Special Needs Plan – The type of plan, often abbreviated as D-SNP, is available only to people who are entitled to both Medicare and Medicaid. If you are eligible for each of these programs, you can receive enhanced benefits that will help raise the quality of your care while reducing costs.

Durable Medical Equipment (DME) – Certain medical equipment that is ordered by a doctor for use in the home. Examples are walkers, wheelchairs or hospital beds. DME is paid for under Medicare Part B and Part A for home health care services.

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E

End-Stage Renal Disease (ESRD) – Permanent kidney failure that requires a regular course of dialysis or a kidney transplant.

Excess Charges – If you are in Original Medicare, this is the difference between a doctor’s or other health care provider’s actual charge (which may be limited by Medicare or the state) and the Medicare-approved payment amount. The only time there are excess charges is when the provider does not accept Medicare.

Explanation of Benefits – The statement sent to covered persons by their health plan listing services provided, amount billed and payment made.

Extra HelpExtra Help/Low Income Subsidy (LIS) – A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, such as premiums, deductibles and coinsurance.

Elderly Pharmaceutical Insurance Coverage (EPIC) ProgramElderly Pharmaceutical Insurance Coverage Program – Find out if you are eligible for assistance in paying for your out-of-pocket Medicare Part D drug plan costs. Call EPIC at 1-800-332-3742 (TTY 1-800-290-9138).

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F

Formulary – A list of prescription drugs covered by a plan.

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G

Generic Drug – Prescription drugs that have the same active ingredients as brand name drugs, but cost less. Generic drugs are rated by the Food and Drug Administration (FDA) to be just as safe and effective as brand name drugs.

Grievance – A complaint about the way your Medicare health plan is giving care. For example, you may file a grievance if you have a problem calling the plan or if you are unhappy with the way a staff person at the plan has behaved toward you. A grievance is not the way to deal with a complaint about a treatment decision or a service that is not covered. (See Appeal.)

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H

Health Insurance Portability and Accountability Act (HIPAA) – A federal law, which requires all group health plans and health insurance issuers to provide evidence of a member’s prior health coverage in the form of a certificate.

Health Maintenance Organization (HMO)Health Maintenance Organization (HMO) Plan – A type of Medicare Advantage plan that is available in some areas of the country. Plans must cover all Medicare Part A and Part B health care services. Some HMOs cover extra benefits, like extra days in the hospital. In most HMOs, you can only go to doctors, specialists or hospitals in the plan’s network except in an emergency.

Home Health CareHome Health Services – Limited part-time or intermittent skilled nursing care and home health aide services, physical therapy, occupational therapy, speech-language pathology services, medical social services, durable medical equipment (such as wheelchairs, hospital beds, oxygen and walkers), medical supplies and other services performed at or used at home.

Hospice Care – A special way of caring for people who are terminally ill. Hospice care involves a team-oriented approach that addresses the medical, physical, social, emotional and spiritual needs of the patient. Hospice also provides support to the patient’s family or caregiver. Hospice care is covered under Medicare Part A. Hospice claims are paid by Medicare, not a Medicare Advantage plan.

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I

Initial Enrollment Period – When you become eligible for Medicare at 65, you have the three months before your birthday, your birthday month and the three months after (seven months total) to enroll in Medicare without financial penalty.

Inpatient Hospital CareInpatient CareInpatient Hospital Stay – Health care that you get when you are admitted to a hospital or skilled nursing facility.

Inpatient Rehabilitation Facility – A hospital, or part of a hospital, that provides an intensive rehabilitation program to inpatients.

Institution – A facility that provides short-term or long-term care, such as a nursing home, skilled nursing facility (SNF) or rehabilitation hospital. Private residences, such as an assisted living facility or group home, are not considered institutions for this purpose.

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L

Lifetime Reserve DaysLifetime Reserve Day – In Original Medicare, a total of 60 extra days that Medicare will pay for when you are in a hospital more than 90 days during a benefit period. Once these 60 reserve days are used, you don't get any more extra days during your lifetime. For each lifetime reserve day, Medicare pays all covered costs except for a daily copayment.

Long-Term Care – A variety of services that help people with health or personal needs and activities of daily living over a period of time. Long-term care can be provided at home, in the community or in various types of facilities, including nursing homes and assisted living facilities. Most long-term care is custodial care. Medicare doesn’t pay for this type of care if this is the only kind of care you need.

Long-Term Care HospitalLong-Term Care Facilities – Acute care hospitals that provide treatment for patients who stay, on average, more than 25 days. Most patients are transferred from an intensive or critical care unit. Services provided include comprehensive rehabilitation, respiratory therapy, head trauma treatment and pain management.

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M

Maximum Out-of-Pocket Limit – A limit set by Medicare Advantage plans on the amount of money you will have to spend in a year. After you spend that amount, your Medicare-covered services are covered in full.

Medicaid – A joint federal and state program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.

Medically Necessary – Services or supplies that are needed for the diagnosis or treatment of your medical condition, meet the standards of good medical practice in the local area, and aren’t mainly for the convenience of you or your doctor.

Medicare Advantage PlanMedicare Advantage – A plan offered by a private company that contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. Medicare Advantage plans include HMOs, PPOs or Private Fee-for-Service Plans. If you are enrolled in a Medicare Advantage plan, Medicare services are covered through the plan.

Medicare Advantage Prescription Drug Plan (MA-PD) – A Medicare Advantage plan that offers Medicare prescription drug coverage (Part D) and Part A and Part B benefits in one plan.

Medicare-Approved Amount – The total amount a doctor or hospital can be paid for a medical service.

Medicare Health Plan – A plan offered by a private company that contracts with Medicare to provide you with your Medicare Part A and/or Part B benefits. Medicare health plans include Medicare Advantage plans (including HMO, PPO, Private Fee-for-Service plans, Medicare Cost plans, PACE plans or special needs plans) and Medigap plans.

Medicare Managed Care Plan – A type of Medicare Advantage plan that is available in some areas of the country. In most managed care plans, you can only go to doctors, specialists or hospitals in the plan’s network. Plans must cover all Medicare Part A and Part B health care. Some managed care plans cover extras, like prescription drugs.

Medicare Prescription Drug Plan (PDP) – A prescription drug plan run by Medicare-approved private insurance companies to help cover the cost of prescription drugs.

Medicare Savings Account Plan (MSA)Medicare Savings Program – A Medicare program that helps eligible people pay for their premiums and deductibles.

Medigap Open Enrollment Period – A one-time-only six-month period when you can buy any Medigap policy you want that is sold in your county. It starts in the first month that you are covered under Medicare Parts A and B. During this period, you cannot be denied enrollment or charged more due to past or present health problems.

Medigap PolicyMedigap PlanMedigap – Medicare supplemental insurance sold by private insurance companies to fill "gaps" in Original Medicare coverage. Medigap policies only work with Original Medicare, not Medicare Advantage plans.

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N

Network – A group of health care providers (hospitals, doctors and pharmacies) that agree to participate with a Medicare Advantage plan.

Non-Formulary Drugs – Prescription drugs not on a plan-approved drug list.

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O

Original Medicare – A fee-for-service health plan that lets you go to any doctor, hospital or other health care supplier who accepts Medicare and is accepting new Medicare patients. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance). If your provider does not accept Medicare, in some cases you may be charged more than the Medicare-approved amount. Original Medicare has two parts: Part A (hospital insurance) and Part B (medical insurance).

Outpatient CareOutpatient Hospital Care – Medical or surgical care furnished by a hospital to you if you have not been admitted as an inpatient but are registered on hospital records as an outpatient. If a doctor orders that you must be placed under observation, it may be considered outpatient care, even if you stay under observation overnight.

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P

Penalty – 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.

Point-of-Service Option (POS)Point of Service (POS) Plan – An HMO option that lets you use doctors and hospitals outside the plan for an additional cost.

Pre-Existing Condition – A health problem you had before the date that a new insurance policy starts.

Preferred Provider Organization (PPO) Plan – A type of Medicare Advantage plan in which you pay less if you use doctors, hospitals and providers that belong to the network. You can use doctors, hospitals and providers outside of the network for an additional cost.

Premium – The periodic payment to Medicare or an insurance company for health care and/or prescription drug coverage.

Preventive ServicesPreventive Health Screenings – Health care screenings to keep you healthy or to prevent illness (for example, Pap tests, pelvic exams, flu shots and screening mammograms).

Primary Care PhysicianPrimary Care Doctor – A doctor who is trained to give you basic care. Your primary care doctor is the doctor you see first for most health problems. He or she makes sure that you get the care that you need to keep you healthy. He or she may talk with other doctors and health care providers about your care and refer you to them. In many HMOs, you must see your primary care doctor before you can see any other health care provider.

Private Fee-for-Service (PFFS) Plan – A type of Medicare Advantage plan in which you may go to any Medicare-approved doctor or hospital that accepts the plan’s payment. The insurance plan, rather than Medicare, decides the terms, including how much it will pay and what you pay for the services you get. You may pay more or less for Medicare-covered benefits. You may have extra benefits Original Medicare doesn’t cover.

Programs of All-Inclusive Care for the Elderly (PACE) – PACE combines medical, social and long-term care services for frail people to help people stay independent and living in their community as long as possible, while getting the high-quality care they need. PACE is available only in states that have chosen to offer it under Medicaid.

Provider – A person or organization (doctor, hospital, pharmacy, lab, outpatient clinic, etc.) that provides medical services.

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R

Referral – A written order from your primary care doctor for you to see a specialist or get certain services. In some HMOs, you need to get a referral before you can get care from anyone except your primary care doctor. If you don’t get a referral first, the plan may not pay for your care.

Rehabilitation – Rehabilitative services are ordered by your doctor to help you recover from an illness or injury. These services are given by nurses and physical, occupational and speech therapists. Examples include working with a physical therapist to help you walk and with an occupational therapist to help you get dressed.

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S

Service Area – The geographic area where a health plan accepts members. For plans that require you to use their doctors and hospitals, it is also the area where services are provided. The plan may be required to disenroll you if you move out of the plan’s service area.

Skilled Nursing Facility (SNF)Skilled Nursing Facilities – A nursing facility with the staff and equipment to give skilled nursing care and/or skilled rehabilitation services and other related health services.

Special Needs Plan (SNP) – A type of plan that provides more focused health care for people who meet a specific set of medical conditions, such as certain chronic medical conditions.

Specialist – A doctor who treats only certain parts of the body, certain health problems or certain age groups. For example, some doctors treat only heart problems.

State Health Insurance Assistance Program (SHIP) – A state program funded by the federal government that gives free local health insurance counseling to people with Medicare. Volunteer counselors provide information and assistance so that you can make your own decisions regarding which Medicare plan you choose.

State Medical Assistance Office – A state agency that is in charge of the state’s Medicaid program and can give information about programs that help pay medical bills for people with low incomes.

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T

Tiers – To have lower costs, many plans place drugs into different "tiers," which cost different amounts. Each plan can form their tiers in different ways.

True Out-of-Pocket costs (TrOOP)True Out-of-Pocket expenses (TrOOP) – The amount paid toward the cost of your prescription drugs (deductible, copays, coinsurance and payments) during the course of the year.

TTY Teletypewriter (TTY) is a communication device used by people who are deaf, hard of hearing or have a severe-speech impairment. A TTY consists of a keyboard, display screen and modem. Messages travel over regular telephone lines. People who don’t have a TTY can communicate with a TTY user through a message relay center (MRC). An MRC has TTY operators available to send and interpret TTY messages. Also known as Telecommunications Device for the Deaf (TDD).

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U

Unassigned Claim – A claim submitted for a service or supply by a provider who does not accept assignment.

Urgently Needed Care – Care that you get for a sudden illness or injury that needs medical care right away, but is not life threatening.