Medicare Glossary

Need help understanding senior insurance and Medicare terms? No need to worry with NCC's Medicare glossary. We understand for many new or young Medicare insurance agents it can be overwhelming to learn all things Medicare. Even experienced Medicare insurance agents need refreshing on all the ins and outs of the industry. Please look over our Medicare glossary to familiarize yourself with commonly used terminology.
 Medicare Glossary
Assignment

An agreement by your doctor, provider or supplier to be paid directly by Medicare, to accept the payment amount Medicare approves for the service, and not to bill you for any more than the Medicare deductible and coinsurance. 

 

A "TIER"

Is a list of drugs. The plan may have several tiers and the copayment amount depends on which tier the drug is listed. Plans can choose their own tiers, so clients should refer to their benefit booklet or contact the plan for more information. 

 

Annual Enrollment (Election) Period (AEP)

The period from October 15 to December 7 is when you can enroll in a Medicare Advantage plan with Part D or a stand-alone Prescription Drug Plan, or switch Medicare plans.

 

Appeal

A formal complaint you can make if your Medicare plan doesn't pay for a drug or service and you think it should.

 

Benefit period

The way that Original Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you're admitted as an inpatient in a hospital or skilled nursing facility. The benefit period ends when you haven't received any inpatient 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 for each benefit period. There's no limit to the number of benefit periods.

 

Brand-name drug

A prescription drug that's marketed by the company that was first to receive FDA approval to sell it. The FDA allows this company to exclusively sell the drug for a number of years before allowing other companies to sell generic versions of it.

 

Centers for Medicare & Medicaid Services (CMS)

The branch of the Department of Health and Human Services that administers Medicare.

 

Catastrophic coverage

The part of the prescription drug benefit that kicks in after you have paid a certain amount in a calendar year.

 

Coinsurance

The percentage of the costs you pay for medical or prescription drugs.

 

Copayment

The fixed dollar amount you pay when you receive medical services or have a prescription filled.

 

Coverage gap

An interval in some Part D drug plans during which you must pay 100 percent of your prescription costs. Also known as the "doughnut hole," the gap begins after your costs reach an initial coverage limit and ends after you have paid enough to become eligible for catastrophic coverage.

 

Creditable coverage

Prescription drug coverage, generally from an employer or union, that's been determined to be, on average, at least as good as the Medicare standard prescription drug coverage.

 

Critical access hospital

A small facility that provides outpatient services, as well as inpatient services on a limited basis, to people in rural areas.

 

Custodial care

Nonskilled personal care—for help with daily activities such as bathing, dressing, eating, getting in or out of a bed or chair, moving around, and using the bathroom—may also include the kind of health-related care that most people do themselves, like using eye drops. In most cases, Medicare doesn't pay for custodial care.

 

Deductible

The amount you pay for medical services or prescription drugs before your plan starts paying benefits.

 

Demonstrations

Special projects, sometimes called "pilot programs" or "research studies," that test improvements in Medicare coverage, payment and quality of care. They usually operate for a limited time, for a specific group of people, and in specific areas.

 

Durable medical equipment (DME)

Certain medical equipment that is ordered by your doctor for use in your home. Some examples are walkers, wheelchairs and hospital beds.

 

End-stage renal disease (ESRD)

Permanent kidney failure that requires a transplant or dialysis.

 

Extra Help

Financial assistance from Medicare to help cover Part D drug plan costs. Also known as the low-income subsidy (LIS). To determine if you are eligible for Extra Help or other government assistance, visit the Medicare website or call us anytime to learn more.

 

Formulary

A list of prescription drugs your Medicare Advantage or prescription drug plan covers.

 

General Enrollment Period (GEP)

January 1 through March 31 of each year. If you enroll in Premium Part A or Part B during this period, your coverage starts on July 1.

 

Generic drug

A prescription drug that usually costs less than a brand-name drug but has the same active ingredients and is prescribed for the same reason.

 

Grievance

Any expression of dissatisfaction (complaint) you make about us or one of our network providers or pharmacies, including a complaint concerning the quality of your care. This type of complaint does not involve coverage or payment disputes.

 

Health Maintenance Organization (HMO)

A type of Medicare Advantage plan that requires you to choose a primary physician from a network of approved healthcare providers. To see a specialist, a referral from the primary care physician is required.

 

Initial Enrollment Period (IEP)

The 7-month period when you first can enroll in Medicare (3 months before you turn 65, the month of your birthday, and the 3 months afterward).

 

Inpatient rehabilitation facility

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

 

Institution

For the purposes of this publication, an institution is 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, aren't considered institutions for this purpose.

 

Late-enrollment penalty

A higher premium charge based on the number of months a Medicare Part D-eligible person does not have creditable coverage. The premium that would otherwise apply is increased by at least one percent of the national benchmark beneficiary premium, which is set by CMS and published each year, for each month without creditable coverage.

 

Lifetime reserve days

In Original Medicare, these are additional days that Medicare will pay for when you're in a hospital for more than 90 days. You have a total of 60 reserve days that can be used during your lifetime. For each lifetime reserve day, Medicare pays all covered costs except for a daily coinsurance.

 

Long-term care

Services that include medical and non-medical care provided to people who are unable to perform basic activities of daily living, like dressing or bathing. Long-term supports and services can be provided at home, in the community, in assisted living, or in nursing homes. Individuals may need long-term supports and services at any age. Medicare and most health insurance plans don't pay for long-term care.

 

Long-term care hospital

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.

 

Low-income subsidy (LIS)

See Extra Help.

 

Medically necessary

A service the doctor and patient agree that your medical condition requires in order to detect, manage or cure an illness that you've been diagnosed with or that you're at risk for.

 

Medicaid

A joint federal and state program, separate from Medicare, that helps pay medical costs for people with low incomes, limited assets and disabilities.

 

Medi-Cal

The official name of the Medicaid program in California.

 

Medicare

The federal health insurance program for people age 65 and older. It is also available to some people under 65 who have certain disabilities, and to people with end-stage renal disease.

 

Medicare Advantage

See Medicare Part C.

 

Medicare Advantage Disenrollment Period

The period from January 1 to February 14 when you can cancel your Medicare Advantage enrollment and switch to Original Medicare (Parts A and B only) or to a Medicare Cost plan with or without Part D coverage. If you switch to Original Medicare or a Cost plan without Part D, you also may choose a separate Medicare prescription drug plan (PDP) at the same time.

 

Medicare Advantage Prescription Drug (MAPD) plan

A Medicare-approved health plan from a private insurance company that provides medical coverage as well as prescription drug coverage.

 

Medicare-approved amount

In Original Medicare, this is the amount a doctor or supplier that accepts assignment can be paid. It may be less than the actual amount a doctor or supplier charges. Medicare pays part of this amount, and you're responsible for the difference.

 

Medicare Cost plan

A plan offered through private health care companies that covers Part B services, and may include Part A services, as well as other benefits, such as the option of receiving prescription drug coverage (Medicare Part D). Cost plans allow you the option of receiving care from non-plan providers by paying Original Medicare deductibles and coinsurance.

 

Medicare health plan

A plan offered by a private company that contracts with Medicare to provide Part A and Part B benefits to people with Medicare who enroll in the plan. Medicare health plans include all Medicare Advantage Plans, Medicare Cost Plans, Demonstration/Pilot Programs and Programs of All-inclusive Care for the Elderly (PACE).

 

Medicare Part A

Coverage that helps pay for hospital stays, skilled nursing care, some home health services and hospice care.

 

Medicare Part B

Coverage that helps pay for physicians' services, outpatient care and other medical services not covered by Part A. Parts A and B together are known as Original Medicare.

 

Medicare Part C (Medicare Advantage)

A plan offered by a private organization as an alternative to Parts A and B only. Part C plans and Cost plans may offer more benefits than Original Medicare and may include Part D coverage.

 

Medicare Part D

Prescription drug coverage available as a stand-alone plan (PDP) or as part of a Medicare Advantage plan (MA-PD).

 

Medicare plan

Refers to any way other than Original Medicare that you can get your Medicare health or prescription drug coverage. This term includes all Medicare health plans and Medicare Prescription Drug Plans.

 

Medical Savings Account (MSA) plan

An insurance plan for people with Medicare that combines a high deductible health plan and a bank account.

 

Medicare supplemental insurance

Plans sold by private companies to supplement Original Medicare coverage. Also known as Medigap plans, they are not to be confused with Medicare Advantage (Part C) or Cost plans.

 

Medigap

See Medicare supplemental insurance.

 

Original Medicare (also known as Traditional Medicare or fee-for-service Medicare)

Collective term for Medicare Parts A and B. A government-sponsored plan administered by the Centers for Medicare & Medicaid Services (CMS).

 

Out-of-pocket costs

Any amounts you pay out of your pocket for medical care, prescription drugs and other healthcare supplies, services and equipment. Out-of-pocket costs include copayments, deductibles and coinsurance.

 

Preferred Provider Organization (PPO)

A type of Medicare Advantage plan that allows you to see in-network or out-of-network doctors and other healthcare providers wherein you save money by using providers who are in the plan's network.

 

Prescription Drug Plan (PDP)

An insurance plan that helps pay for medications a doctor prescribes. You can purchase a PDP from a Medicare-approved private insurer.

 

Premium

The monthly payment made to Medicare, an insurance company or a healthcare plan.

 

Preventive services

Health care to prevent illness or detect illness at an early stage, when treatment is likely to work best (for example, preventive services include Pap tests, flu shots and screening mammograms).

 

Primary care doctor

The doctor you see first for most health problems. He or she makes sure you get the care you need to keep you healthy. He or she also may talk with other doctors and health care providers about your care and refer you to them. In many Medicare Advantage Plans, you must see your primary care doctor before you see any other health care provider.

 

Primary care practitioner

A doctor who has a primary specialty in family medicine, internal medicine, geriatric medicine, or pediatric medicine; or a nurse practitioner, clinical nurse specialist, or physician assistant.

 

Private-Fee-for-Service (PFFS) plan

A type of Medicare Advantage plan that allows the client to go to any doctor or hospital that accepts Medicare and agrees to accept the plan's terms and conditions. A PFFS plan has no provider network and you don't need a referral for any medical care of services. This type of plan generally provides more benefits than Original Medicare. A PFFS is not a Medicare Supplement.

 

Quality Improvement Organization (QIO)

A group of practicing doctors and other health care experts paid by the federal government to check and improve the care given to people with Medicare.

 

Referral

A written order from your primary care doctor for you to see a specialist or get certain medical services. In many Health Maintenance Organizations (HMOs), you need to get a referral before you can get medical care from anyone except your primary care doctor. If you don't get a referral first, the plan may not pay for the services.

 

Service area

A geographic area where a health insurance plan accepts members if it limits membership based on where people live. For plans that limit which doctors and hospitals you may use, it's also generally the area where you can get routine (non-emergency) services. The plan may disenroll you if you move out of the plan's service area.

 

Skilled nursing facility (SNF) care

Skilled nursing care and rehabilitation services provided on a continuous, daily basis, in a skilled nursing facility. Examples of skilled nursing facility care include physical therapy or intravenous injections that can only be given by a registered nurse or doctor.

 

Special Enrollment Period (SEP)

A time other than the annual election period or initial enrollment period when you may join, change or drop a Medicare plan. An SEP can be triggered by certain events, such as a change in residence.

 

Special Needs Plan (SNP)

A Medicare Advantage plan for people who are institutionalized, or entitled to both Medicare and state Medicaid benefits, or have certain chronic conditions.

 

Total drug costs

The total amount paid by both the client and prescription drug plan for prescription drugs.

 

TTY

A teletypewriter (TTY) is a communication device used by people who are deaf, hard-of-hearing, or who have a severe speech impairment. 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.

 

Unassigned claim

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

 

Urgently Needed Care

Care that is received for a sudden illness or injury that needs medical care right away, but is not life-threatening. The primary care doctor generally provides urgently needed care if the client is enrolled in a Medicare health plan other than the Original Medicare Plan. If you are out of your plan's service area for a short time and cannot wait until you return home, the health plan must pay for urgently needed care.

 

Voluntary Agreement

Agreements between CMS and various insurers and employers to exchange Medicare information and group health plan eligibility information for the purpose of coordinating health benefit payments.

 

Voluntary Enrollee

Certain individuals, aged 65 or older or disabled, who are not otherwise entitled to Medicare and who opt to obtain coverage under Part A by paying a monthly premium.

 

Waiting Period

The time between when you sign up with a Medigap insurance company or Medicare health plan and when the coverage starts.

 

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