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Medicare Glossary: Key Terms and Definitions

These terms and definitions are intended to be educational. Some of these terms might not have exactly the same meaning when used in a policy or plan, and in any such case the policy or plan governs. This glossary explains terms in the Medicare program, but it isn’t a legal document. The official Medicare program provisions are found in the relevant laws, regulations and rulings.

Accept assignment – See Assignment of benefits.

Advance Beneficiary Notice of Noncoverage (ABN) - In Original Medicare, you should receive an ABN from doctors or providers/suppliers if they believe a service or item they are going to provide to you might be denied for payment by Medicare.

Advance coverage decision – For Medicare Advantage plans, this is a notice prior to a medical service that the service in question will be covered.

Annual Election Period (AEP) – May also be called Annual Enrollment Period. Running from October 15 to December 7 each year, this is the time those who are Medicare-eligible can enroll or disenroll from Medicare Advantage plans. You are free to enroll and disenroll multiple times during this period. The last enrollment request made during the period will be the one that goes into effect.

Annual Notice of Change (ANOC) – For Medicare Advantage plans and Medicare Part D plans, the ANOC notifies enrolled members of changes to coverages, service areas or costs for the coming year, starting on January 1.

Appeal – If you disagree with a payment or coverage decision made by Medicare or by your Medicare health plan or prescription drug plan, you can make an appeal for reconsideration of the coverage. See also Grievance.

Assignment of Benefits – Refers to doctors and providers who have agreed to be paid directly by Medicare, to accept the Medicare-approved payment for services and to not bill for more than that.

Authorization – See Prior authorization.

Balance billing – See Excess charges.

Beneficiary – Someone who receives health insurance through a Medicare or Medicaid program.

Benefit period – Under Medicare Part A, a benefit period begins when you enter a hospital or skilled nursing facility and ends once you have been out of that facility for 60 consecutive days. This means you could potentially be in the hospital more than once during a benefit period or have multiple benefit periods during a calendar year. For each of those benefit periods, you would have to pay your Medicare Part A deductible.

Benefits – The care, services and items covered under a health insurance plan.

Brand-name drug – Per the U.S. Food and Drug Administration (FDA), drugs marketed under a trademarked name are considered brand-name drugs.

Carrier – A private insurance company contracted with Medicare to provide coverage to Medicare beneficiaries for Medicare Supplement plans, Medicare Advantage (Part C) plans or prescription drug plans.

Catastrophic coverage – In health insurance, generally speaking, catastrophic coverage is designed to help insure you against high out-of-pocket costs beyond a certain, set amount. In Medicare, the concept applies in three main areas:

Centers for Medicare & Medicaid Services (CMS) – A federal agency, part of the U.S. Department of Health and Human Services, that administers Medicare, Medicaid and other health programs, standards and certifications.

Certificate of Creditable Coverage – If you don’t enroll in Medicare Part D (prescription drug) coverage once you are eligible because you still have health insurance from another source (group coverage if you are still employed, for example), you will need this certificate, issued by your health plan, as evidence you were continuously covered by a health insurance plan meeting a minimum set of qualifications when you are ready to enroll in Part D coverage. This enables you to avoid the penalties that come with enrolling in Part D coverage after your initial enrollment period.

Claim – A request for payment you make to Medicare or your insurance carrier.

COBRA – The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 enables employees leaving a company under certain circumstances to continue to be covered under their company group health insurance plan for a limited time. For Medicare purposes, if you have coverage under COBRA at your Medicare initial enrollment period:

Coinsurance – A percentage you pay of covered expenses after you’ve met your deductible. As an example, for a covered medical cost of $100, if you have a 20% coinsurance, your portion of the cost would be $20.

Coordination of benefits – The process through which different insurance plans held by an insured person determine which plan is responsible for paying which covered services.

Copay or Copayment – A preset amount you pay for a certain covered service.

Cost sharing – Any costs you are required to pay toward covered medical expenses. Can include coinsurance, copays and deductibles. See also Out-of-pocket costs.

Coverage determination (Medicare Part D) – You can request a coverage determination under Medicare Part D to learn whether a drug prescribed for you is covered by your plan and what you would be required to pay or do to get the prescribed drug.

Coverage gap (Medicare Part D) – See Donut hole.

Creditable coverage – Health insurance coverage that meets a minimum set of requirements. If you choose not to enroll in Medicare Part D during your initial coverage enrollment period, you need to have continuous creditable drug coverage to avoid a late enrollment penalty.

Custodial care – Type of nonskilled care involving help for daily living like getting dressed or fixing and eating meals. Medicare generally doesn’t cover custodial care.

Deductible – The amount you pay toward covered medical expenses before your Medicare plan pays anything.

Department of Health and Human Services (HHS) – The United States government department that includes the Centers for Medicare & Medicaid Services (CMS), the agency that administers Medicare.

Disenroll – If you are enrolled in a Medicare Part C (Medicare Advantage) plan, you can remove yourself from this plan and go back to Original Medicare during the Annual Election Period or during the Medicare Advantage Disenrollment Period (MADP).

Disenrollment period (Medicare Part C) – See Medicare Advantage Disenrollment Period (MADP).

Donut hole (Medicare Part D)Medicare prescription drug coverage (Part D) plans have a coverage gap commonly called the “donut hole.” After you and your Part D plan combined have spent a certain amount on prescription drugs for the year ($3750 for 2018), you enter the donut hole, where you are responsible for a larger share of drug costs.

Note: In 2011, a “Donut hole discount” on drugs was introduced to help those who fell into the Part D coverage gap. In 2018, while you are in the donut hole, you receive a 65% discount on brand-name drugs and a 44% discount on generic drugs. You stay in the donut hole until you reach the catastrophic coverage limit ($5000 for 2018), after which you pay only a small copay or coinsurance for drugs for the remainder of the year.

Drug list – See Formulary.

Dual eligible – Those who qualify for both Medicare and Medicaid benefits.

Durable Medical Equipment (DME) – Special equipment prescribed by a doctor and usually covered by Medicare Part A and B: walkers and wheelchairs, hospital beds, etc.

Durable power of attorney – See Power of attorney.

Emergency – See Medical emergency.

End Stage Renal Disease (ESRD) – Kidney failure that requires regular dialysis or a transplant. ESRD can make you eligible to enroll in Medicare prior to age 65.

Exception – Related to Part D coverage, a decision to cover a drug not initially on a plan's drug list or to lower the price. This is in answer to a formal written request made by you and your doctor.

Excess charges – The additional cost a doctor’s office or health care facility charges for a medical service beyond the Medicare-approved amount. Cannot be more than 15% above the Medicare-approved amount.

Exclusions – Care, services and items not covered under a given health insurance plan.

Expedited organization determination – A quick decision made by a Medicare health plan regarding whether or not a medical service will be covered or how it will be paid. Usually these are expedited when the life or healthy functioning of the requesting patient is in jeopardy.

Extra Help (Part D plans) – Medicare program that helps those meeting low income or resource requirements to pay for Medicare Part D prescription drug coverage costs like premiums, deductibles and coinsurance. Also called the Low Income Subsidy (LIS) for Medicare prescription drug coverage.

Fall open enrollment – See Annual Election Period.

Federal Employees Health Benefits (FEHB) plan – Provides access to health coverage for current and retired federal employees. These plans can often work together with your Medicare coverage. When you approach your Initial Enrollment Period for Medicare, consult your retirement office for what might be the best option for your situation.

Federally Qualified Health Center (FQHC) – Designation provided by the Centers for Medicare and Medicaid Services to community-based primary and preventive health care facilities. They are federally funded nonprofits that provide health care services to underserved areas and those who can’t afford to pay.

Fee-for-service – Insurance model through which doctors or health care facilities receive payment based on service or services provided. See also Medicare Private Fee-For-Service (PFFS) plan.

Formulary – The list of covered drugs in a Medicare Part D prescription drug coverage plan or other insurance plan offering drug coverage. More simply known as a drug list.

General Enrollment Period – Period from January 1 through March 31 each year when you can enroll for Medicare Part A or Part B coverage if you did not apply for it during your Initial Enrollment Period. Note: You may face late enrollment penalties on your premium if you didn’t enroll when you were initially eligible.

Generic drug - According to the U.S. Food and Drug Administration (FDA), a generic drug is one equal to the brand-name version in “dosage, safety, strength, how it is taken, quality, performance, and intended use.”

Grievance – A complaint you file about how your Medicare health or drug plan is being administered. If your plan wasn’t answering repeated requests you’ve made or if a staff member treated you badly, these would be examples of when you might submit a grievance. Not to be confused with an appeal, which is what you file to request coverage for a service, supply or drug not initially covered by your plan.

Group health plan – Generally speaking, an employer- or union-supported health plan that gives coverage to employees, retired employees and their families.

Guaranteed issue – Health plans that are guaranteed issue can’t turn you down for coverage based on pre-existing conditions or current health issues. In Medicare:

Guaranteed renewable –Your Medicare Supplement (Medigap) plan is automatically renewed each year and cannot be terminated by the insurance carrier unless you fail to pay the premium, lie to the company or commit fraud against your plan.

Health care provider – Any person or organization licensed to give care.

Health Insurance Portability and Accountability Act of 1996 (HIPAA) – Law that among other things makes details related to your medical care into protected health information (PHI) that must be kept secure even when being exchanged from one health care provider to another.

Health Maintenance Organization (HMO) – See Medicare Health Maintenance Organization (HMO) plan.

High-deductible Medigap policy – A Medicare Supplement plan that offers a lower monthly payment but comes with a higher deductible. Not available in all areas.

Home health care – Health care service and supplies you receive in your home under doctor’s orders and as part of doctor’s care plan. Medicare coverage of this type of care is limited.

Hospice care – Special care for the terminally ill. Medicare Part A includes coverage for hospice care.

Independent Review Entity (IRE) or Independent reviewer – An outside organization contracted by Medicare to review an appeal you file against your Medicare health or drug plan.

Initial coverage limit (Part D plans) – If the retail cost of prescriptions you buy through your Medicare prescription drug plan reaches this threshold ($3,750 in 2018) during the year, then you move into the Medicare Part D’s “donut hole” coverage gap. Note: Retail cost is figured based on what the drugs actually cost, not just the portion you pay.

Initial Enrollment Period (IEP) – The seven-month period of time when you are first eligible to enroll in Medicare. Unless you have a special circumstance, it begins three months before the month you turn 65 and closes three months after your birthday month.

In-network – If your health plan has a network, this term refers to any doctor, health care facility or pharmacy that has agreed to treat members of that health plan at pre-negotiated discounted rates. Note: Some health plans (like many HMOs) restrict plan members to only in-network providers.

Inpatient care – Health care treatment provided to you while you are admitted to a hospital or a skilled nursing facility.

Inpatient hospital care - Health care treatment provided to you while you are admitted to a hospital.

Inpatient hospital services – Services provided to you while you are admitted to a hospital, including your room and bed, meals, nursing care, tests, and so on.

Inpatient Prospective Payment System (IPPS) – Predetermined rates of payment hospitals that contract with Medicare agree to in order to provide inpatient care to Medicare patients.

Inpatient rehabilitation facility – A health care facility or part of hospital that provides rehabilitation services to inpatients, that is, patients who have been admitted to that facility by a doctor’s orders.

Lifetime reserve days – Under Medicare Parts A, these are 60 days of coverage you are given as a reserve to use for hospital stays lasting longer than 90 days in a given benefit period. You pay a small copayment for each lifetime reserve day you use. Also, once each of these 60 days is used, it is expired for your lifetime. They do not renew from year to year.

Limiting charge – See Excess charges.

Long-term care – Ongoing help with daily living like cooking and eating, getting dressed, bathing or showering, and so on. Can be provided at home, through the community or in assisted living or nursing facilities. Medicare generally doesn’t cover this type of care.

Long-term care hospital – A hospital where patients stay longer than 25 days and are in need of serious medical care and services like intensive rehabilitation, respiratory therapy and pain management among others.

Low income subsidy (LIS) (Part D plans) – Medicare program that helps those meeting low income or resource requirements to pay for Medicare Part D prescription drug coverage costs like premiums, deductibles and coinsurance. Also called Extra Help.

MA plan – See Medicare Advantage plan.

Managed care – See Medicare managed care plan.

Medicaid – A joint federal and state program designed to help people with limited income or resources with medical costs. If you are dual eligible, qualify for both Medicaid and Medicare, most of your health care costs will be covered.

Medicaid and Medicare together – See Dual eligible.

Medicaid certified-provider – Any provider, like a hospital, home health agency or dialysis facility, that has passed a state inspection and been approved by Medicaid.

Medical emergency – An injury or illness that you believe will cause disability or death if not treated immediately. See also Urgently needed care.

Medical underwriting – The process by which an insurance company considers your medical history and decides whether or not to insure you and how much to charge.

Medically necessary – Services or supplies that meet current medical standards and are required to diagnose and treat an injury, illness, condition or disease or its symptoms.

Medicare – Federal health insurance program covering people 65 or older, people under 65 with certain disabilities or those with End Stage Renal Disease (ESRD), which is permanent kidney failure.

Medicare Advantage Disenrollment Period (MADP) – The existing Medicare Advantage Disenrollment Period prior to 2019 took place from January 1 through February 14 every year. Effective for 2019, the MADP is replaced with a new Medicare Advantage open enrollment period (OEP) that will take place from January 1 through March 31 annually. The new OEP allows individuals enrolled in an MA plan, including newly MA-eligible individuals, to make a one-time election to go to another MA plan or Original Medicare. Individuals using the OEP to make a change may make a coordinating change to add or drop Part D coverage.

Medicare Advantage Open Enrollment Period – Takes place from January 1 through March 31 every year and allows individuals enrolled in an MA plan, including newly MA-eligible individuals, to make a one-time election to go to another MA plan or Original Medicare. Individuals using the OEP to make a change may make a coordinating change to add or drop Part D coverage.

Medicare Advantage plan (Part C) – A Medicare health insurance plan that’s offered by a private company that rolls your Medicare Part A and Medicare Part B coverage into one plan and provides at least as much coverage as Parts A and B do, and often more. Medicare Advantage plans often include Medicare Part D prescription drug coverage as well, putting all your Medicare coverage in one place.

Also called MA plans, they generally have network restrictions but more generous benefits than Medicare Parts A and B. Different options are available by county and include Health Maintenance Organizations (HMOs), Point-of-Service (POS) plans, Preferred Provider Organizations (PPOs) and Private Fee-For-Service (PFFS) plans.

If for some reason, you aren’t satisfied with your MA plan, you can switch back to Original Medicare during select enrollment periods.

Medicare Advantage Prescription Drug (MA-PD) plan – A Medicare Advantage (Part C) plan that includes Medicare Part D prescription drug coverage.

Medicare and Medicaid together – See Dual eligible.

Medicare and You – Official U.S Government Medicare Handbook. Each Medicare-eligible individual is entitled to one free copy.

Medicare-approved amount – The amount paid to doctors or other health care providers/suppliers for a given medical service or supply when they agree to assignment of benefits from Medicare. They may charge up to 15% more beyond this amount (called excess charges) if they refuse to accept Medicare assignment. You, as the patient, would be responsible for anything over the Medicare-approved amount.

Medicare-approved supplier – A company, agency or person certified by Medicare to provide a medical service or supply.

Medicare-certified provider – A health care provider that’s been approved by Medicare, which means they’ve passed Medicare-sponsored inspections by a state agency. Includes hospitals, home health agencies, dialysis facilities, etc.

Medicare Coordinated Care plan – A Medicare Advantage (Part C) plan that provides health care through an established, Medicare-approved network of providers. Options vary by county but could include Health Maintenance Organizations (HMOs), Point-of-Service (POS) plans, Preferred Provider Organizations (PPOs) and even Special Needs Plans (SNPs).

Medicare Cost Plan – A type of Medicare plan where any Medicare-covered emergency or urgently needed services you get outside the plan’s network without a referral will be paid for under Original Medicare (Medicare Parts A and B). These plans are not available in all counties. Note: You would be subject to Part A and Part B deductibles and other uncovered costs on anything paid for under Original Medicare.

Medicare Easy Pay – Free, electronic payment option for Medicare that deducts monthly premium payments automatically from a savings or checking account.

Medicare Health Maintenance Organization (HMO) plan – A Medicare Advantage (Part C) plan that requires you to use the plan’s network of providers, except in cases of emergency, and generally has you select a Primary care doctor (PCP) to refer you to specialists as needed.

Medicare health plan – Any private insurance company health plan that through a contract with Medicare provides your Medicare Parts A and B benefits. Examples include Medicare Advantage plans or Medicare Cost plans.

Medicare managed care plan – A Medicare Advantage (Part C) plan that generally requires the use of network of doctors and hospitals for care. However, plans also generally offer benefits that go beyond the coverage you get with Original Medicare (Medicare Parts A and B) and can also bundle in Medicare Part D prescription drug coverage. Plan availability varies by county.

Medicare Medical Savings Account (MSA) plan – A type of high-deductible Medicare Advantage (Part C) plan that pairs the high-deductible plan with a Medical Savings Account (MSA). At the beginning of the year Medicare deposits money in your MSA to use toward your health care expenses. That money is yours to use on health expenses such as deductibles, it earns interest and it even stays in the account at the end of the year if there’s some left.

Medicare Part A – Medicare Part A is the hospital insurance portion of Medicare, covering hospital stays, skilled nursing facilities, hospice care, and home health care in some cases.

Medicare Part B – Medicare Part B is the medical insurance portion of Medicare, covering such things as doctor visits, outpatient care, home health care in some cases, and certain preventive services.

Medicare Part C – Medicare health insurance plan that’s offered by a private company that rolls your Medicare Part A and Medicare Part B into one plan and provides at least as much coverage as Parts A and B do, and often more. Medicare Advantage plans often roll Medicare Part D prescription drug coverage in as well, collecting all your Medicare coverage in one place.

Also called MA plans, they generally have network restrictions but more generous benefits than Medicare Parts A and B. Different options are available by county and include Health Maintenance Organizations (HMOs), Point-of-Service (POS) plans, Preferred Provider Organizations (PPOs) and Private Fee-For-Service (PFFS) plans.

If for some reason, you aren’t satisfied with your MA plan, you can switch back to Original Medicare during select enrollment periods.

Medicare Part D – Medicare Part D is the prescription drug coverage portion of Medicare. This coverage is offered through private insurance companies under contract with Medicare. It can be purchased on its own as a standalone plan or as part of a Medicare Advantage Prescription Drug (MA-PD) plan.

Medicare Point-of-Service (POS) plan – This is a less common version of a Medicare Health Maintenance Organization (HMO) plan that allows you some access to out-of-network heath care services (beyond emergency care) at a higher cost. See also Medicare Health Maintenance Organization (HMO) plan.

Medicare Preferred Provider Organization (PPO) plan – In this type of Medicare Advantage (Part C) plan you pay less when you use doctors, providers and facilities in the plan network, but still have access to doctors, providers and facilities outside the network at a higher cost.

Medicare prescription drug coverage – See Medicare Part D.

Medicare Private Fee-For-Service (PFFS) plan – This type of Medicare Advantage (Part C) plan allows you to go to any doctor or hospital that accepts Medicare Part A and Part B (Original Medicare). If the doctor or hospital agrees to treat you, the plan will determine what it will pay the provider and what portion you will have to pay.

Note: Under a PFFS plan, doctors and hospitals don’t have to agree to the terms of the plan and don’t have to agree to treat you. You have to ask the doctor or hospital each time you use them if they will accept the terms of the plan for that service.

Medicare savings programs – State programs to help those who qualify pay Medicare Part A and B deductibles, coinsurance and copays. They include the Qualified Disabled and Working Individuals (QDWI) program, Qualified Medicare Beneficiary (QMB) program, Qualifying Individual (QI) program and Specified Low-Income Medicare Beneficiary (SLMB) program.

Medicare SELECT – This type of Medicare Supplement (Medigap) plan requires you to use hospitals and in some cases doctors that are in a certain network to get full benefits.

Medicare Special Needs Plan (SNP) – A Medicare Advantage (Part C) plan that provides specialized health benefits for a specific group of people, like those eligible for both Medicaid and Medicare or those with certain chronic medical conditions.

Medicare Summary Notice (MSN) – The notice you receive after your Medicare Part A or Medicare Part B pays a claim. It shows what the provider billed, the Medicare-approved amount for that service, what Medicare subsequently paid and what you must pay (if anything).

Medicare Supplement open enrollment period – Once you turn 65 or older and are covered under Medicare Part B, you have this 6-month period in which to buy any Medicare Supplement plan sold in your state. During this time, plans are guaranteed issue, meaning you can’t be turned down or charged more based on any current or prior health conditions.

Medicare Supplement plan – Also called Medigap plans, these are supplemental plans sold by private insurance companies and designed to fill in the gaps in costs covered by Medicare Parts A and B (Original Medicare). Plans are designated by letter, Plan A, Plan B, etc., and each plan with the same letter covers the same costs not paid by Original Medicare regardless of what company sells it, though some companies may offer more benefits. That means a Plan F sold by one company has the same basic benefits as a Plan F sold by a different company.

Medigap basic benefits – The benefits that all Medicare Supplement (Medigap) plans have to cover.

Medigap plan – See Medicare Supplement plan.

Network – A group of doctors, hospitals and other health care providers and facilities that have contracted with a health insurer or health plan to offer medical services to members.

Network pharmacies – Pharmacies that have agreed to charge discounted rates on prescriptions and other supplies and services to members of certain health plans. Some Medicare plans require you to use a network pharmacy if you want your prescription to be covered.

Non-formulary drug – Any drug not on your Medicare Part D prescription drug plan’s approved drug list.

Non-preferred pharmacy – A pharmacy that’s part of a Medicare prescription drug plan’s network, but isn’t preferred. That means if you use it, you may pay more out-of-pocket than you would at a pharmacy designated as preferred.

Open Enrollment – See Annual Election Period, Medicare Advantage open enrollment period and Medicare Supplement open enrollment period.

Optional supplemental benefits – Any benefits offered by a Medicare health plan covering services not covered by Medicare.

Organization determination – A decision made by a Medicare health plan regarding whether or not a medical service will be covered or how it will be paid. See also Expedited organization determination.

Original Medicare – Term referring to Medicare Parts A (hospital) and B (medical).

Out-of-network – Refers to doctors, hospitals or facilities that aren’t in your health plan’s network and the services you receive from them. Depending on your health plan, out-of-network care may result in your paying all or part of your medical costs.

Out-of-pocket costs – Any medical expenses that you pay because they aren’t paid for by Medicare, your Medicare health plan or other insurance. See also Cost sharing.

Out-of-pocket maximum – Also called an out-of-pocket limit, this is the most you pay during year toward your own medical costs. Every plan has different rules for what contributes to your out-of-pocket maximum for the year, but premiums generally aren’t included.

Important: Medicare Parts A and B (Original Medicare) on their own have no out-of-pocket maximum. You must have a Medicare Supplement plan in place or choose a Medicare Advantage (Part C) plan instead.

Outpatient – Type of care you get from a clinic, hospital or facility without being admitted. Can include emergency department services, X-rays, observations, etc.

Part A – See Medicare Part A.

Part B – See Medicare Part B.

Part C – See Medicare Advantage plan.

Part D – See Medicare Part D.

Penalty – Both Medicare Part B and Medicare Part D prescription drug plans impose a permanent penalty on your monthly payment if you don’t enroll when initially eligible, unless you qualify for an exception.

  • Part B adds 10% to your Part B premium for each full 12-month period you were eligible to have Part B coverage but didn’t enroll, unless you qualify for a Special Enrollment Period (SEP).
  • Part D adds a penalty to your Medicare Part prescription drug plan premium if you delay getting coverage. The penalty is calculated as 1% of the average monthly prescription drug premium for every month you were late getting coverage, unless you qualify for a Special Enrollment Period (SEP) or the Extra Help program.

Pharmacy network – A group of pharmacies that have agreed to charge discounted rates on prescriptions and other supplies and services to members of certain health plans. Some Medicare plans require you to use a pharmacy within a certain network if you want your prescription to be covered.

Plan A, Plan B, etc. – Plans with a letter following them refer to Medicare Supplement plans, also known as Medigap plans. These are plans offered through Medicare-approved private insurance carriers and help pay some of the costs not paid by Original Medicare. Each plan with the same letter covers the same basic benefits regardless of what company sells it, though some plans may offer more benefits beyond the basic. That means a Plan F sold by one company has the same basic benefits as a Plan F sold by a different company.

Point-of-Service (POS) plan – See Medicare Point-of-Service (POS) plan.

Power of attorney – In a medical context, a durable power of attorney is a document used to appoint someone to make health care decisions for you if you can’t make decisions on your own.

Pre-existing conditions – Any condition or illness you were diagnosed with or received treatment for prior to the beginning of your being covered by a specific insurance plan.

Preferred pharmacy – Preferred pharmacies that are part of a Medicare prescription drug plan’s network will generally provide lower out-of-pocket costs on prescriptions, services and supplies than one that isn’t preferred.

Preferred Provider Organization (PPO) plan – See Medicare Preferred Provider Organization (PPO) plan.

Premium – A payment, usually monthly, made to Medicare, an insurance company or a health plan for your coverage.

Prescription drug coverage – See Medicare Part D.

Preventive services – Medical services designed to detect health care problems early, preventing you from getting sick or giving you the opportunity to address illnesses or conditions when treatment has the best chance to work.

Primary care doctor (or Primary care provider) – The doctor you choose to see first and for most of your medical problems. Many Medicare Advantage (Part C) plans require you to get a referral from your primary care doctor before seeing a specialist or other provider.

Prior authorization – An approval you must have from your plan before getting certain procedures, services or drugs in order for that procedure, service or drug to be covered by the plan.

Private Fee-For-Service (PFFS) plan – See Medicare Private Fee-For-Service (PFFS) plan.

Programs of All-inclusive Care for the Elderly (PACE) – Medicare and Medicaid program that helps people meet their health care needs in the community instead of going to a nursing home or other care facility.

Qualified Disabled and Working Individuals (QDWI) program – A Medicare savings program that helps those who qualify pay for Medicare Part A premiums.

Qualified Medicare Beneficiary (QMB) program – A Medicare savings program that helps those who qualify pay for Medicare Part A and B deductibles, coinsurance and copays.

Qualifying Individual (QI) program – A Medicare savings program that helps those who qualify pay for Medicare Part B premiums.

Quantity limits – In Medicare Part D prescription drug plans, restrictions on how much of a certain medication you can get during a certain time limit. You would need to apply for an exception to exceed that limit.

Referral – An official written order from your primary care doctor given so that you can see a specialist or seek specific medical services. In some Medicare Advantage (Part C) plans, you must get a referral before the plan will pay for certain services.

Rehabilitation services – Any service that helps you get back, improve or keep daily living skills that you may be losing or may have lost because of sickness, accident or disability.

Respite care – Temporary care provided in skilled nursing facilities, also called nursing homes; hospice; or hospitals to give a patient’s caregiver (often a family member or friend) a chance to rest and take time off.

Rural health clinic – A Federally Qualified Health Center (FQHC) that provides health care services in rural areas lacking in them.

Secondary payer – The insurance policy, plan or program that pays second on an insurance claim.

Service area – The geographic area in which a certain insurance plan is offered. Also, the area that contains the network of doctors and providers required by a given plan, or in which plan members can go for routine medical services.

Skilled nursing care – Medical care that needs to be given by a licensed nurse such as a registered nurse or licensed practical nurse.

Skilled nursing facility – A health care facility that has both the staff and equipment to offer skilled nursing care to patients or residents.

Skilled nursing facility care – A level of skilled nursing care and rehabilitation provided regularly in a skilled nursing facility that couldn’t realistically be provided on an outpatient basis.

Social Security check deduction – If you are enrolled in Medicare Part B and you receive Social Security, your premium will be automatically deducted your Social Security check.

Special Enrollment Period (SEP) – This is a period of time during which you can make changes to your Medicare Advantage (Part C) plan or Medicare Part D prescription drug coverage if you qualify because of special circumstances, including but not limited to moving to a new area, losing Medicaid eligibility, involuntarily losing other creditable coverage, or Medicare ending your current plan or sanctioning it.

Can also refer to a special period of time when you can enroll in Medicare Part B (medical) coverage without penalty even if you didn’t do so when originally eligible. If you did not enroll in Medicare Part B because you still had coverage through your or your spouse’s employer, you qualify for an SEP of 8 months following the month that employment or coverage ends.

Special Needs Plan (SNP) – See Medicare Special Needs Plan.

Specified Low-Income Medicare Beneficiary (SLMB) program – A Medicare savings program that helps those who qualify pay for Medicare Part B premiums.

Spending limit – See Out-of-pocket maximum.

Step therapy – Used by some Medicare Part D prescription drug plans as a cost control. Requires you to use one or more similar, and often less expensive, drugs for treatment first before the plan will cover a prescribed but more expensive drug.

Stop loss coverage – See Catastrophic coverage.

Summary notice – See Medicare Summary Notice.

Supplement plan – See Medicare Supplement plan.

Tiers – A way health insurance and prescription drug plans classify drugs to control their costs. They decide what drugs to place in what “tiers,” that is, at what cost level. What drugs are in what tiers varies from plan to plan, and can change from year to year, so keeping current on your plan’s drug list and tier structure is important.

TRICARE – Health care program for active duty and retired uniformed service people and their families.

TRICARE FOR LIFE (TFL) – Expanded medical coverage available to Medicare-eligible uniformed services retirees age 65 or over, and eligible family, survivors and certain former spouses.

Urgently needed care – Care for a sudden illness or injury that, though not life-threatening, needs to be treated immediately because waiting would not be safe. If you are outside your plan’s service area, this level of care would still be covered by your plan. See also Medical emergency.

Veterans Affairs (VA) benefits – Health coverage for veterans and individuals who have served in the U.S. military. You can have both Medicare and VA benefits, but the two do not work together. You would need to decide for a given medical expense whether you wanted to receive care at a Medicare-certified provider or through a VA facility.

Waiting period – The period of time a Medicare Supplement plan may make you wait to cover your out-of-pocket costs stemming from a pre-existing condition you had when you enrolled in the plan. This waiting period can be up to 6 months, after which expenses from the condition would be covered under the plan just like any other condition.

1 You must continue to pay your Medicare Part B premium.



Plans are insured through UnitedHealthcare Insurance Company or one of its affiliated companies. For Medicare Advantage and Prescription Drug Plans: A Medicare Advantage organization with a Medicare contract and a Medicare-approved Part D sponsor. Enrollment in these plans depends on the plan's contract renewal with Medicare.




Last Updated: 11.09.2018 12:01AM ET Y0066_181022_085639 Accepted

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