Medicare Glossary Help | Healthcare Terms | Medicare Made Clear


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  • accept assignment

    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.

  • Annual Notice of Change (ANOC)

    A document that private Medicare plans send to plan members each fall. The ANOC includes the details of any changes in plan coverage, costs, or service area that will go into effect the following January 1.


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  • balance billing

    In Medicare Part B, doctors who do not accept assignment may use this method to bill you for an additional payment. Balance billing is also known as “excess charges.” A doctor’s excess charges cannot be more than 15% of the Medicare approved amount. In some states balance billing may be limited to less than 15% or may not be allowed at all.

  • benefit period

    In Medicare Part A, a benefit period begins the day you go into a hospital or skilled nursing facility. It ends when you have been out for 60 days in a row. You may be in the hospital more than once during one benefit period. There is no limit on the number of benefit periods that Medicare will cover. Part A charges a deductible for each benefit period.

  • brand name drug

    A prescription drug that is sold under a trademarked brand name.


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  • catastrophic coverage

    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.

  • Centers for Medicare & Medicaid Services (CMS)

    The federal government agency that runs the Medicare program and works with the states to manage their Medicaid programs.


    COBRA stand 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.

  • Co-insurance

    A percentage of the cost for a service, which you split with your plan. For example, Medicare Part B might pay 80% of the cost of a medical service and you would pay 20%.

  • coordinated care

    In Medicare Advantage (Part C), this refers to a kind of health care plan that links providers and services to deliver efficient, cost-effective patient care. Plan members usually have to use doctors and hospitals that are within the plan’s network. These plans are also referred to as “managed care plans.”

  • co-payment

    A pre-set, fixed amount that you pay for a service at the time you receive it. In a Medicare Part D plan, for example, you might pay a $15 copayment for each prescription you fill. Also called a “co-pay.”

  • cost sharing

    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.

  • coverage gap

    The cost-sharing stage of a Medicare Part D plan in which you pay most of the plan’s discounted price for your covered medications. You enter the coverage gap when you, others on your behalf and the plan together have paid a pre-set amount for your drugs. This amount is determined by the plan, but Medicare establishes a maximum. You remain in the coverage gap stage until you have spent your plan’s out-of-pocket limit in a single year. Deductibles, copays, coinsurance and other payments count toward the out-of-pocket limit, but premiums do not.

  • creditable 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

    Care that provides help with the activities of daily living, like eating, bathing or getting dressed. Most long-term care is considered custodial care.


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  • deductible

    A pre-set, fixed amount that you pay for your medical care and services first, before Medicare or other insurance starts to pay.

  • dual eligible

    A person who is eligible for both Original Medicare (Parts A and B) and Medicaid.


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  • End Stage Renal Disease (ESRD)

    Permanent kidney failure requiring 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—generally 15%.

  • Extra Help

    A Medicare program that helps people with limited income and resources pay for Medicare prescription drug plan costs, such as premiums, deductibles and coinsurance.


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  • formulary

    A list of the prescription drugs that are covered by a specific Medicare Part D plan.


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  • General Enrollment Period

    This is when you can enroll in Medicare if you didn’t sign up during your Initial Enrollment Period. The General Enrollment Period (GEP) is January 1 – March 31 every year. You may have to pay a penalty for late enrollment. Coverage takes effect on July 1.

  • generic drug

    Generic prescription drugs are lower-cost alternatives to brand name drugs. They use the same active ingredients as their brand name counterparts and work the same way. According to the FDA, generic drugs are the same as brand name drugs in safety, strength, quality, the way they work, how they’re taken and the way they should be used.

  • guaranteed renewable plan

    A feature of Medicare supplement insurance (Medigap) plans where the coverage must be automatically renewed each year, as long as you pay the premium and have truthfully completed your Medicare supplement insurance application.


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  • Health Maintenance Organization (HMO) plan

    A type of Medicare Advantage plan in which you must use doctors and hospitals in the plan’s network for your care. If you go outside the network for services other than emergency care, urgent care or out-of-area renal dialysis, you are responsible for paying for your own care.

  • high-deductible Medicare Advantage plan

    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.

  • home health care

    In Original Medicare, skilled nursing care and therapy, such as speech therapy or physical therapy, provided on a part-time or intermittent basis to those who cannot leave the home.

  • hospice care

    Care for those who are terminally ill. Hospice care typically focuses on controlling symptoms and managing pain. In Part A, hospice care also includes support services for both patient and caregivers. Part A covers hospice care received at home and care received in a hospice outside the home.


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  • Initial Enrollment Period (IEP)

    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.

  • inpatient care

    Care you receive in a hospital when you are admitted by doctor’s order. You can be in the hospital--even overnight--and not be an inpatient. For example, you may be in for observation. It’s important to ask your doctor or a hospital staff member if you have been admitted. If you are not, some of the care and services you receive may not be covered by Part A.


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  • lifetime reserve days

    In Medicare Part A, a set number of covered hospital days you can draw on if you are in the hospital longer than 90 days in a benefit period. You have 60 lifetime reserve days. A lifetime reserve day cannot be replaced. When it is used up, it is gone.

  • long-term care

    Care that helps with the activities of daily life, like eating, dressing and bathing, over a long period of time.


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  • Medicaid

    A medical assistance program for certain individuals and families with limited incomes and resources. Medicaid is jointly funded by the federal and state governments and managed by the states. It includes programs that help pay Medicare premiums and cost-sharing.

  • Medical Savings Account (MSA)

    A type of Medicare Advantage plan that combines a special bank savings account with a high-deductible Medicare Advantage plan. The money in the savings account can be used only for medical expenses.

  • medically necessary care

    Services or supplies that are needed to diagnose or treat a medical condition, according to the accepted standards of medical practice.

  • Medicare

    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)

  • Medicare Advantage

    A type of plan offered by a private company that provides all the coverage offered by Medicare Parts A and B plus other benefits. Many Medicare Advantage plans also include prescription drug coverage.

  • Medicare Advantage Disenrollment Period

    The period each year from January 1 to February 14 when you can leave a Medicare Advantage plan. You will return to Original Medicare automatically when you disenroll from the Medicare Advantage plan. If your Medicare Advantage plan included prescription drug coverage, you can enroll in a Medicare Part D prescription drug plan during this time.

  • Medicare-approved amount

    The amount Medicare determines to be reasonable for a covered service. Providers who “accept assignment” agree to accept this amount as payment in full. Providers who accept Medicare but not assignment can charge up to 15% above this amount.

  • Medicare assignment

    Medicare assignment refers to the Medicare-approved amount for payment in full for a medical service. Doctors can choose to accept 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.

  • Medicare Open Enrollment

    The time period each year during which you may enroll in Medicare prescription drug plans (Part D) and Medicare Advantage (Part C) plans. Medicare Open Enrollment is October 15 through December 7 every year.

  • Medicare Savings Account plan (MSA)

    A type of Medicare Advantage plan that combines a high-deductible health plan with a savings account. You use money from the savings account to pay your health care costs.

  • Medicare Savings Program

    Medicare program that helps eligible people pay some or all of their Medicare premiums. In some cases, the program may also help with deductibles copayments and coinsurance.

  • Medicare SELECT

    A special type of Medicare supplement insurance plan that requires you to use specific hospitals, and in some cases, specific doctors, to get your full insurance benefits (except in an emergency).

  • Medicare supplement insurance

    A plan provided by a private insurance company that pays for some of the cost sharing, such as deductibles, copays and coinsurance, in Original Medicare coverage. Medicare supplement insurance plans are available in standard types of plans. Each plan is named with a letter of the alphabet. Don’t confuse Medicare supplement plans A, B, C and D with Medicare Parts A, B, C and D.

  • Medicare supplement insurance Open Enrollment Period

    The time period during which you are guaranteed the right to buy any Medicare supplement insurance plan available where you live. This period includes the six months after you are enrolled in Medicare Part B. During this time, the insurer cannot refuse to sell you a plan or charge a higher premium due to your medical history or current health.

  • Medigap

    A term sometimes used to refer to Medicare supplement insurance.


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  • network

    The group of health care providers, such as hospitals, doctors and pharmacies, that agrees to provide care to the members of a Medicare Advantage coordinated care plan or Medicare Part D prescription drug plan. These providers are called “network providers” and “network pharmacies.”


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  • out-of-pocket costs

    The amount you pay directly for Medicare care and services, including deductibles, copays and coinsurance. Premiums do not count toward maximum out-of-pocket costs thresholds.

  • out-of-pocket limit

    A limit that Medicare Advantage plans set on the amount of money you will have to spend out of your own pocket in a plan year. In Medicare Part D plans, this is the maximum amount of money you will have to spend out of your own pocket before catastrophic coverage begins for the remainder of the year.

  • outpatient care

    Care you receive in a clinic, hospital or health care facility when you are not admitted for an inpatient stay.


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  • part

    A name congress used to label sections of the law that created Medicare.

  • Part A

    The part of Original Medicare that provides help with the cost of hospital stays, skilled nursing services following a hospital stay and other kinds of skilled care.

  • Part B

    The part of Original Medicare that provides help with the cost of doctor visits and other medical services.

  • Part C

    Known as Medicare Advantage, this part of Medicare allows private insurance companies to offer plans that combine help paying for hospital costs (Part A) with coverage for doctor visits and other medical services (Part B) all in one plan. Many Medicare Advantage plans also include prescription drug coverage (Part D).

  • Part D

    This part of Medicare allows private insurance companies to offer plans that help with the cost of prescription drugs. You can get Medicare Part D coverage as a standalone prescription drug plan or as part of a Medicare Advantage plan.

  • Point of Service (POS) plan

    A type of Medicare Advantage HMO plan that allows members the ability to visit doctors and hospitals outside their network for some covered services, usually for a higher copayment or coinsurance. Some POS plans do not require referrals for specialty services.

  • pre-existing condition

    When you are applying for an insurance plan, a name for an illness or medical condition that you have already been diagnosed with.

  • Preferred Provider Organization (PPO)

    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.

  • premium

    A fixed amount you have to pay to participate in a plan or program, usually as a monthly payment.

  • prescription drug plan

    A standalone Medicare Part D insurance plan that helps with the cost of prescription drugs.

  • preventive care

    Care that is meant to keep you healthy or to find illness early when treatment is most effective. Examples of preventive care are flu shots, screening mammograms and diabetes screenings.

  • Private Fee-For-Service plan (PFFS)

    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.

  • Program of All Inclusive Care for the Elderly (PACE)

    Helps individuals over the age of 55 live independently in their communities for as long as possible by providing them with a combination of medical, social and long-term care services. PACE is available only in states that have chosen to offer it as part of their Medicaid program.

  • provider

    A person or organization that provides medical services and products, such as a doctor, hospital, pharmacy, laboratory or outpatient clinic.


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  • qualifying disability

    A medical or physical condition that has lasted, or is expected to last, more than 12 calendar months and that prevents you from working.


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  • retiree health coverage

    Group health insurance coverage offered through an employer or other plan sponsor to retired employees.


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  • service area

    In Medicare Advantage, the area in which a plan offers service. A service area is typically a county, state or region.

  • skilled nursing care

    Nursing care that should be provided only by a licensed nurse.

  • Special Enrollment Period

    Specific times when people who qualify due to special circumstances may enroll in Medicare outside their Initial Enrollment Period or the General Enrollment Period. Usually, you don’t pay a late enrollment penalty if you sign up during a Special Enrollment Period.

  • Special Needs Plan (SNP)

    A type of Medicare Advantage plan that serves people with special health care needs.

  • step therapy

    In Medicare Part D, a special procedure you and your doctor must follow before you can use certain drugs. You must first try a less expensive drug to see if it works for you. You may try a more expensive drug that treats the same condition only if you and your doctor can show that the less expensive drug didn’t work for you.


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  • tiered formulary

    In Medicare Part D, a drug plan formulary that divides drugs into groups. Each group, or tier, has a different level of cost sharing. For example, a generic version of a drug may have a lower copay than a brand name version of the drug. The details of the cost sharing vary from plan to plan.