Medicare Glossary

Find definitions for common terms and abbreviations related to Medicare and Dental Insurance.

A

Additional Benefits

Some benefits not covered by Medicare, such as travel to a foreign country, are covered by some Medicare supplement insurance plans. When looking at Medicare supplement insurance plans, be sure to find out if the plan offers the additional benefits you need.

Advance Beneficiary Notice of Noncoverage (ABN)

In Original Medicare, a notice that a doctor, supplier, or provider gives a person with Medicare before furnishing an item or service if the doctor, supplier, or provider believes that Medicare may deny payment. In this situation, if you aren’t given an ABN before you get the item or service, and Medicare denies payment, then you may not have to pay for it. If you are given an ABN, and you sign it, you’ll probably have to pay for the item or service if Medicare denies payment.

Advance Directive

A written document stating how you want medical decisions to be made if you lose the ability to make them for yourself. It may include a living will and a durable power of attorney for health care.

After Gap

If your annual costs hit a certain limit, you enter this phase and will only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.

Age-Attained Pricing

How it’s priced:
The premium is based on your current age (the age you have “attained”), so your premium goes up as you get older.

What this pricing may mean for you:
Premiums are low for younger buyers, but go up as you get older. They may be the least expensive at first, but they can eventually become the most expensive. Premiums may also go up because of inflation and other factors.

Annual Enrollment Period

Anyone can make changes to their coverage and enroll in a Medicare plan each year, from October 15 to December 7. During this time you can:

Switch to a Medicare Advantage plan (Part C) from Original Medicare (Parts A and B) — or vice versa.
Switch from a Medicare Advantage plan (Part C) with prescription drug coverage to one without — or vice versa.
Join or drop a Medicare prescription drug plan (Part D).
Update your coverage by switching to a new plan from your current insurer or switching to a new insurer.

If you choose to make a change during the Annual Enrollment Period, your new coverage will begin on January 1.

Annual High Deductible

The amount of Medicare-eligible expenses that must be satisfied each calendar year while this policy is in force before any benefits will be paid. The Medicare-eligible expenses include the Medicare deductibles for Part A and Part B, but do not include the separate foreign travel emergency deductible. The amount of the annual high deductible can be changed yearly by the U.S. Department of Health and Human Services.

Appeal

An appeal is the action you can take if you disagree with a coverage or payment decision made by Medicare, your Medicare health plan, or your Medicare Prescription Drug Plan. You can appeal if Medicare or your plan denies one of these:

Your request for a health care service, supply, item, or prescription drug that you think you should be able to get
Your request for payment for a health care service, supply, item, or prescription drug you already got
Your request to change the amount you must pay for a health care service, supply, item or prescription drug.

You can also appeal if Medicare or your plan stops providing or paying for all or part of a service, supply, item, or prescription drug you think you still need.

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.

Audiologist

An audiologist is a licensed hearing health care professional who specializes in the diagnosis and treatment of hearing loss and balance disorders in adults and children.

B

Basic Services

Treatments and procedures that are relatively straightforward for the dentist and include fillings and non-surgical tooth extractions.

Before Gap

Once you’ve met your deductible, you will pay a copay or coinsurance for each medication based on which tier the drug falls into.

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 SNF. The benefit period ends when you haven’t gotten 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.

C

Calendar Year Benefit

The maximum amount the Dental Insurance policy pays each calendar year for all covered dental services. Also referred to as the Annual Maximum Benefit.

Calendar Year Deductible

The allowed amount of expense you must incur and pay in covered dental services each calendar year before benefits are paid for certain benefit classes.

Catastrophic Coverage

Once you’ve spent $7,400 out-of-pocket in 2023 (up from $7,050 in 2022), you’re out of the coverage gap. Once you get out of the Medicare prescription drug coverage gap, you automatically get ‘catastrophic coverage’. It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.

CMS

U.S. Centers for Medicare & Medicaid Services

Coinsurance

An amount you may be required to pay as your share of the cost for services after you pay any deductibles. Coinsurance is usually a percentage (for example, 20%).

Community Rated Pricing

How it’s priced:
Generally the same monthly premium is charged to everyone who has the Medigap policy, regardless of age.

What this pricing may mean for you:
Your premium isn’t based on your age. Premiums may go up because of inflation and other factors, but not because of your age.

Copayment

An amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor’s visit, hospital outpatient visit, or prescription drug. A copayment is usually a set amount, rather than a percentage. For example, you might pay $10 or $20 for a doctor’s visit or prescription drug.

Coverage Determination (Part D)

The first decision made by your Medicare drug plan (not the pharmacy) about your drug benefits, including:

Whether a particular drug is covered
Whether you have met all the requirements for getting a requested drug
How much you’re required to pay for a drug
Whether to make an exception to a plan rule when you request it

The drug plan must give you a prompt decision (72 hours for standard requests, 24 hours for expedited requests). If you disagree with the plan’s coverage determination, the next step is an appeal.

Coverage Gap

A period of time in which you pay higher cost sharing for prescription drugs until you spend enough to qualify for catastrophic coverage. The coverage gap (also called the “donut hole”) starts when you and your plan have paid a set dollar amount for prescription. After your total drug spend for the year hits a threshold defined by the Medicare program, you enter the “coverage gap” or “donut hole.” During this phase of coverage, your cost sharing changes to be generally 25% of the cost of the drug.

Creditable Coverage (Medigap/Med Supp)

Previous health insurance coverage that can be used to shorten a pre-existing condition waiting period under a Medicare Supplement Insurance (Medigap) policy.

Creditable Prescription Drug Coverage

Prescription drug coverage (for example, from an employer or union) that’s expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage. People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penalty, if they decide to enroll in Medicare prescription drug coverage later.

D

Deductible

The amount you must pay for health care or prescriptions before Original Medicare, your prescription drug plan, or your other insurance begins to pay.

DME

Also known as Durable Medical Equipment

Certain medical equipment, like a walker, wheelchair, or hospital bed, that’s ordered by your doctor for use in the home.

Donut Hole

See Coverage Gap

Durable Medical Equipment

Certain medical equipment, like a walker, wheelchair, or hospital bed, that’s ordered by your doctor for use in the home.

During Gap

You enter this stage when your total drug costs — including what you and your plan have paid for your drugs — reach a certain limit.

E

Effective Date

An effective date is the date in which your insurance coverage begins. Insurance providers will not pay for benefits incurred before the effective date

Emergency Care

Emergency Care
Care needed immediately because of a medical condition of sudden and unexpected onset.

EOB

Also known as Explanation of Benefits.

Explanation of benefits statements are a document you will receive from your insurance company outlines the cost of the medical care your received. It outlines what costs will be covered by your insurance provider and what costs, if any that you are responsible for paying.

Exception

A type of Medicare prescription drug coverage determination. A formulary exception is a drug plan’s decision to cover a drug that’s not on its drug list or to waive a coverage rule. A tiering exception is a drug plan’s decision to charge a lower amount for a drug that’s on its non-preferred drug tier. You or your prescriber must request an exception, and your doctor or other prescriber must provide a supporting statement explaining the medical reason for the exception.

Excess Charge

If you have Original Medicare, and the amount a doctor or other health care provider is legally permitted to charge is higher than the Medicare-approved amount, the difference is called the excess charge.

Explanation of Benefit

Also known as EOBs.

Extra Help (Part D)

A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, like premiums, deductibles and coinsurance.

F

Formulary

A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. Also called a drug list.

G

Generic Drug (Tier 2)

Medications that are more expensive than Tier 1, but still generic medicines.

Grievance

A complaint about the way your Medicare health plan or Medicare drug plan is giving care. For example, you may file a grievance if you have a problem calling the plan or if you’re unhappy with the way a staff person at the plan has behaved towards you. However, if you have a complaint about a plan’s refusal to cover a service, supply, or prescription, you file an appeal.

Guaranteed Issue Rights

Also called ‘Medigap protections’. Rights you have in certain situations when insurance companies are required by law to sell or offer you a Medigap policy. In these situations, an insurance company can’t deny you a Medicare Supplement policy, nor place conditions on a policy (such as exclusions for pre-existing conditions), and can’t charge you more for a policy because of a past or present health problem.

Guaranteed Renewable Policy

An insurance policy that can’t be terminated by the insurance company unless you make untrue statements to the insurance company, commit fraud, or don’t pay your premiums. All Medigap policies issued since 1992 are guaranteed renewable.

H

Home Health Care

Health care services and supplies a doctor decides you may get in your home under a plan of care established by your doctor. Medicare only covers home health care on a limited basis as ordered by your doctor.

Home Health Provider

A person or organization that’s licensed to give health care. Doctors, nurses, and hospitals are examples of health care providers.

Hospital Policy Definition

A place Medicare has defined and approved for payment as a hospital.

Household Premium Discount

A discount that some states allow that provides a reduction of Medicare supplement premiums if the policyholder resides with another adult or spouse. There are state requirements that must be met in order to qualify for this discount. Policyholders should review their outline for details and restrictions.

I

Initial Coverage Limit

Specific to prescription drug plans, once you’ve met your deductible, you will pay for a portion of each medication through a copay or coinsurance based on which tier the drug falls into. Tiers include Preferred Generic, which typically has the lowest copay, and Specialty Drugs, which typically has the highest. The initial coverage limit is set annually by Medicare, for 2023 the limit is $4,660 (up from $4,430 in 2022).

Initial Enrollment Period

This seven-month period begins three months prior to the month you turn 65, includes your birthday month, and ends three months after your birthday month. During this time, you can:

Enroll in Original Medicare (Parts A and B)
Enroll in a Medicare prescription drug plan (Part D)
Enroll in a Medicare Advantage plan (Part C)

Enrolling during your Initial Enrollment Period can help you avoid potential penalties.

Issue-Age Pricing

How it’s priced:
The premium is based on the age you are when you buy (when you’re “issued”) the Medigap policy.

What this pricing may mean for you:
Premiums are lower for people who buy at a younger age and won’t change as you get older. Premiums may go up because of inflation and other factors, but not because of your age.

L

Lifetime Maximum Benefit on Implants

The maximum amount the Dental Insurance policy pays for dental implants.

M

Major Services

Treatment and procedures that are relatively complex and often involve a laboratory expense and include dental crowns, surgical extractions or oral surgery, dentures, and tooth implants.

Material Misrepresentation

Failure to disclose information you were requested to disclose on your application which, if disclosed, would have required a different premium or caused us to deny issuing your policy.

Medicaid

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

Medical Underwriting

The process that an insurance company uses to decide, based on your medical history, whether to take your application for insurance, whether to add a waiting period for pre-existing conditions (if your state law allows it), and how much to charge you for that insurance.

Medically Necessary

Health care services or supplies needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.

Medicare

Medicare is the federal health insurance program for:

People who are 65 or older
Certain younger people with disabilities
People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD)

Medicare Advantage Plan (Part C)

A type of Medicare health plan offered by a private company that contracts with Medicare. Medicare Advantage Plans provide all of your Part A and Part B benefits, excluding hospice. Medicare Advantage Plans include:

Health Maintenance Organizations
Preferred Provider Organizations
Private Fee-for-Service (PFFS) Plans
Special Needs Plans
Medicare Medical Savings Account Plans

If you’re enrolled in a Medicare Advantage Plan:

Most Medicare services are covered through the plan
Medicare services aren’t paid for by Original Medicare
Most Medicare Advantage Plans offer prescription drug coverage.

Medicare Drug Plan (Part D)

Part D adds prescription drug coverage to:

Original Medicare
Some Medicare Cost Plans
Some Medicare Private-Fee-for-Service Plans
Medicare Medical Savings Account Plans

These plans are offered by insurance companies and other private companies approved by Medicare. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare drug plans.

Medicare Part A (Hospital Insurance)

Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.

Medicare Part B (Medical Insurance)

Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.

Medicare Part C

Health Maintenance Organizations
Preferred Provider Organizations
Private Fee-for-Service Plans
Special Needs Plans
Medicare Medical Savings Account Plans

If you’re enrolled in a Medicare Advantage Plan:

Most Medicare services are covered through the plan
Medicare services aren’t paid for by Original Medicare
Most Medicare Advantage Plans offer prescription drug coverage.

Medicare Plan

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 drug plans.

Medicare Supplement Insurance

Medigap is Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost for covered health care services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like:

Copayments
Coinsurance
Deductibles

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-Certified Provider

A health care provider (like a home health agency, hospital, nursing home, or dialysis facility) that’s been approved by Medicare. Providers are approved or “certified” by Medicare if they’ve passed an inspection conducted by a state government agency. Medicare only covers care given by providers who are certified.

Medigap Open Enrollment Period

A one-time only, 6-month period when federal law allows you to buy any Medigap policy you want that’s sold in your state. It starts in the first month that you’re covered under Part B and you’re age 65 or older. During this period, you can’t be denied a Medigap policy or charged more due to past or present health problems. Some states may have additional open enrollment rights under state law.

Medigap Policy

Medicare Supplement Insurance sold by private insurance companies to fill “gaps” in Original Medicare coverage

N

Newly Eligible

Newly eligible for Medicare occurs when you turn 65. You may also be eligible due to a disability or end-stage renal disease (ESRD).

Non-Preferred Brand-Name Drug (Tier 4)

More expensive brand-name drugs.

O

Open Enrollment Period

From October 15 – December 7 each year, you can join, switch or drop a plan. Your coverage will begin on January 1 (as long as the plan gets your request by December 7).

Medicare Advantage and Medicare Prescription Drug Plans policyholders only. Medicare Supplement policyholders may switch year round, but may have to answer health questions. Additional special and state enrollment periods may apply.

Original Medicare

Original Medicare, also referred to as Traditional Medicare, is a fee-for-service health plan that has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). After you pay a deductible, Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance and deductibles).

Out-of-Pocket Costs

Health or prescription drug costs that you must pay on your own because they aren’t covered by Medicare or other insurance.

P

Penalty

An amount added to your monthly premium for Part B or a Medicare drug plan (Part D) if you don’t join when you’re first eligible. You pay this higher amount as long as you have Medicare. There are some exceptions.

Policy Date

The date your coverage starts under this policy.

Policy Renewal Date

The date your policy’s premium is due. The frequency of the policy renewal date will vary depending on whether you pay premiums monthly, quarterly, semiannually, or annually.

Power of Attorney

A medical power of attorney is a document that lets you appoint someone you trust to make decisions about your medical care. This type of advance directive also may be called a health care proxy, appointment of health care agent, or a durable power of attorney for health care.

Pre-Existing Condition

A health problem you had before the date that new health coverage starts.

Preferred Brand-Name Drug (Tier 3)

Brand-name or higher-priced generic prescriptions.

Preferred Generic Drug (Tier 1)

The most commonly prescribed and affordable prescriptions.

Premium

The periodic payment to Medicare, an insurance company, or a health care plan for health or prescription drug coverage.

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). Dental services to care for your gums and teeth to keep them healthy and include oral exams, teeth cleanings and x-rays.

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.

Prior Authorization

Approval that you must get from a Medicare drug plan before you fill your prescription in order for the prescription to be covered by your plan. Your Medicare drug plan may require prior authorization for certain drugs. This is a restriction on certain medications which requires permission from your doctor before the prescription can be filled.

Q

Quantity Limit

This is a restriction on certain Medicare prescription drug plans which restricts the amount of a drug that will be covered for a single copay or within a predefined period of time.

R

Rehabilitation Services

Health care services that help you keep, get back, or improve skills and functioning for daily living that you’ve lost or have been impaired because you were sick, hurt, or disabled. These services may include physical and occupational therapy, speech-language pathology, and psychiatric rehabilitation services in a variety of inpatient and/or outpatient settings.

Retail Cost

You’ll pay this until you hit your deductible.

S

Secondary Payer

The insurance policy, plan, or program that pays second on a claim for medical care. This could be Medicare, Medicaid, or other insurance depending on the situation.

Skilled Nursing Facility

A nursing facility with the staff and equipment to give skilled nursing care and, in most cases, skilled rehabilitative services and other related health services.

Skilled Nursing Facility Care

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

Special Enrollment Periods

You can make changes to your Medicare Advantage and Medicare prescription drug coverage when certain events happen in your life, like if you move or you lose other insurance coverage. These chances to make changes are called Special Enrollment Periods (SEPs). Rules about when you can make changes and the type of changes you can make are different for each SEP.

Specialty Drug (Tier 5)

The most expensive drugs. They treat very complex conditions like cancer.

State Health Insurance Assistance Program (SHIP)

A state program that gets money from the federal government to give free local health insurance counseling to people with Medicare.

State Insurance Department

A state agency that regulates insurance and can provide information about Medigap policies and other private health insurance.

Step Therapy

A coverage rule used by some Medicare Prescription Drug Plans that requires you to try one or more similar, lower cost drugs to treat your condition before the plan will cover the prescribed drug. This is a restriction on certain Medicare prescription drug plans which requires that you try safe, effective, lower cost drugs before the plan covers a more costly drug.

Supplemental Security Income (SSI)

A monthly benefit paid by Social Security to people with limited income and resources who are disabled, blind, or age 65 or older. SSI benefits aren’t the same as Social Security retirement or disability benefits.

T

Telemedicine

Medical or other health services given to a patient using a communications system (like a computer, phone, or television) by a practitioner in a location different than the patients.

Tiers

Groups of drugs that have a different cost for each group. Generally, a drug in a lower tier will cost you less than a drug in a higher tier.

Y

Yearly “Wellness” Visit

If you’ve had Medicare Part B (Medical Insurance) for longer than 12 months, you can get a yearly “Wellness” visit once every 12 months to develop or update a personalized prevention plan to help prevent disease and disability, based on your current health and risk factors. Your provider may also perform a cognitive impairment assessment.